MyLife.com, Inc. and its CEO, Jeffrey Tinsley, have agreed to pay $21 million in consumer redress and injunctive relief after a federal court ruled the company violated the Federal Trade Commission (FTC) Act by engaging in deceptive practices.
The complaint, filed on July 27, 2020, alleged the company sold subscriptions to their criminal background check services by implying individuals had criminal histories only viewable through purchase, a U.S. Department of Justice press release said. The claim that these individuals committed crimes was often false.
“The defendants also misrepresented or failed to disclose material terms of those subscriptions, including that payment for multiple months was charged upfront, that subscriptions would automatically renew, and that the subscription or automatic renewal could be canceled only by calling a customer service center that prevented or discouraged cancellations,” the release said.
The total judgment of $33.9 million was decided by a federal district court in the Central District of California on Oct. 19, the release said. According to the agreement, Tinsley will pay $5 million while MyLife is responsible for the remainder.
The company’s payment will be suspended to $16 million, with the suspension to be lifted “if the court finds that either defendant materially misrepresented their financial status or if MyLife fails to make its required payments,” the release said.
“The Department of Justice and the FTC work hard to protect consumers from deceptive sales practices like those at issue here,” Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division said in the release. “This is a win for consumers, who should not be subjected to misleading statements and marketing tactics.”
