FYE Class Action Challenges Loyalty Program and Magazine Subscription Charges

According to a recent class action lawsuit, FYE and its marketing partner deceive consumers with “free” offers that end up resulting in monthly charges.

Three plaintiffs recently filed a class action lawsuit in Massachusetts federal court against FYE’s parent company, Trans World Entertainment Corp., and a marketing partner for the business, Synapse Group Inc., a Meredith Corp. subsidiary. The plaintiffs claim that the companies trick their customers into signing up for free trials of the FYE loyalty program and magazine subscriptions. However, these “free” trials allegedly result in monthly charges if consumers do not cancel.

“Defendants used highly aggressive sales tactics to charge thousands of consumers for, and profit millions of dollars from, bogus ‘loyalty memberships’ and magazine subscriptions, which consumers did not consent to purchase,” the FYE class action lawsuit claims. “Defendants’ lucrative scheme and predatory business model utilizes a host of highly misleading, confusing, unlawful, deceptive, and unfair acts and practices that deceive consumers.”

The aggressive push of the FYE loyalty program and magazine subscriptions can allegedly be traced to the slow decline of FYE’s CD, DVD, and merchandise business. These services have existed for years but used to be accompanied with an annual charge. However, in 2012, FYE changed tactics and started to charge an $11.99 monthly fee instead.

The plaintiffs argue that FYE pushes “free” trials for their services in an attempt to lock consumers into costly subscription deals. Employees of FYE are allegedly ordered to push the trials on their consumers without informing them that the trials will result in a monthly fee.

Adam Rovinelli, one of the plaintiffs in the FYE class action lawsuit, says he signed up for a VIP Backstage Pass membership card and magazine subscription in November 2017. However, he alleges that he would not have signed up for these offers had he been aware that his credit card would be charged until he canceled the subscriptions.

Rovinelli also claims that his payment information was shared with marketing company Synapse without his consent. This alleged breach of privacy resulted in an unauthorized $42 charge from the company in February 2018. A similar $11.99 charge followed from Trans World Entertainment the next month, according to the FYE class action lawsuit.

After fighting with the company, Rovinelli managed to get the Trans World charge refunded but failed to have the larger Synpase charge returned to him. The two other plaintiffs in the FYE class action have had similar experiences.

Plaintiff attorney Angela M. Edwards recently told Law360 that this behavior is widespread, and what happened to the plaintiffs in the FYE class action has happened to “hundreds, if not thousands, of people all across the country.”

Plaintiffs seek to represent several subclasses of consumers who had their debit cards charged or incurred credit card charges, and were enrolled in VIP Backstage Pass membership services, or charged for magazine subscriptions. The plaintiffs also seek to represent a subclass of Connecticut residents who were hit with FYE loyalty program charges or magazine charges.

The FYE class action lawsuit seeks statutory damages, punitive damages, actual damages, restitution, court costs, and attorneys’ fees.

The shoppers are represented by Angela M. Edwards of the Law Office of Angela Edwards; and Lee S. Shalov and Wade C. Wilkinson of McLaughlin & Stern LLP.

The FYE Class Action Lawsuit is Rovinelli, et al. v. Trans World Entertainment Corp., et al., Case No. 1:18­cv­12377, in the U.S. District Court for the District of Massachusetts.