Attorney general tells of settlement with telemarketer

ST. PAUL (AP) -- A telemarketer accused of misleading U.S. Bank customers into buying services has agreed to pay the state $75,000 and modify several marketing practices, Attorney General Mike Hatch said Tuesday.

A lawsuit filed last summer against MemberWorks Inc. alleged the company paid U.S. Bank $4 million plus commissions for private customer information, then led people they called into believing they were simply signing up for a free 30-day trial for products and services.

Many people ended up paying as much as $80 for a year's worth of products and services from the Stamford, Conn.-based company, not realizing they had asked for them or agreed to pay for them, Hatch said.

Hatch played several recorded phone conversations for reporters on Tuesday in which elderly customers, sometimes confused, tried to keep up with fast-paced telemarketers.

Besides the $75,000 payment, MemberWorks agreed to pay customers double what they were charged for products or services if a tape of their phone conversation with a telemarketer fails to show they knowingly agreed to a purchase.

The company also agreed to preserve tapes of phone calls for 24 months and to send customers renewal information each year about services that would otherwise automatically be renewed.

MemberWorks released a statement acknowledging the settlement while saying its business and privacy policies ''have withstood the unsubstantiated and politically charged claims'' by Hatch's office.

The company said it provides discounts in such areas as insurance, travel and health care.

Hatch announced the settlement a few hours before Republicans on a House panel voted to table telecommunications privacy legislation, likely killing it for this session.

The legislation would restrict the use of credit cards by telemarketers and prevent phone companies from selling customer numbers to businesses.

Rep. Matt Entenza, DFL-St. Paul, the sponsor of the bill, said he was frustrated by the committee's action. The House Commerce Committee's vote to table the bill was 10-8 along party lines, with Republicans voting to table it.

''I'm bewildered that Republicans who say they support privacy then turn around and kill the only telecommunications privacy bill of the legislative session,'' he said.