IF YOU HEAR OR READ ANYTHING ABOUT Classmates.com this winter, it’ll likely be this: In March, the Seattle-based social network settled a class-action lawsuit alleging it had duped many of its nearly 60 million members into paying for its services. Creating an account on the site is free, but interacting with other members requires a paid membership. And for years the company had sent emails to its users, tempting them to upgrade by claiming that unnamed friends had peeped their profile. Turns out, though, that more often than not those “friends” were phantoms, random visitors who’d stumbled upon a profile by accident. November 18 is the deadline for aggrieved parties—basically anyone who created an account, paid or unpaid, from October 30, 2004, to February 23, 2011—to claim their share of the $2.5 million settlement. (In an odd twist of jurisprudence, the money will be divvied up evenly among claimants. In other words, if only you and one friend submit the paperwork, you’ll each walk away with $1.25 million. So…let’s keep this between the two of us.)
What you probably won’t hear about, though, is the—some say—shady way that Classmates has kept its paying customers forking over cash long after they’ve stopped using the site. “They’re counting on people not doing their research before they sign up,” says Brian Daugherty.
Daugherty, a Bellevue resident and 1980 graduate of North Kitsap High School, signed up for a one-year Gold Membership for $19.95 in February 2010 in the hopes of using Classmates to organize his 30th high school reunion. He managed to track down a few old friends through the site—Facebook ended up being much more useful, he says—and then forgot all about it. That is, until he saw his credit card statement the following February: Not only had his membership been renewed for another year without his knowledge, but now the service cost $39. “I actually thought it was a mistake,” he says. When he called Classmates to alert them to the seemingly erroneous charge, they informed him that by signing up, he had agreed to automatic renewal after one year. He was welcome to cancel, the customer service rep told him, but he would forfeit the second year’s fee. Despite Daugherty’s protests, the company refused to budge, insisting that it didn’t offer refunds. That’s when he turned to the Washington State Attorney General for help.
Between January 2010 and September 2011, more than 220 people from across the country filed complaints with Washington’s AG about Classmates’ renewal policy. All had similar stories: They signed up for one year, discovered later they’d been charged for a second at nearly double the cost, and were then informed it was too late to cancel. “Classmates.com was brutal with the intent to enforce their policy,” says Earl Sedlik, a longtime Seattle resident who also got caught by the site’s auto-renewal policy in February. “I’m an old-timer by a lot of standards, but I’m savvy enough to know when I’m being abused.”
Assistant Attorney General Shannon Smith stops short of accusing the company of abusing its customers. (Classmates—which, coincidentally or not, rebranded itself as Memory Lane in February—did not reply to a request for comment for this story.) But, she says, the sheer number of complaints raises questions about the verbiage of the renewal policy. “When you have terms like that, you should clearly and conspicuously disclose to the consumer that they’re going to be renewed automatically.” The attorney general hasn’t sued Classmates for violating Washington’s Consumer Protection Act, and Smith wouldn’t say whether the office has launched an investigation. The AG’s office filed 33 such suits against other companies from January 2010 through August 2011.
In most cases—including Daugherty’s and Sedlik’s—Classmates quickly refunded its angry customers’ money once the AG got involved. But it’s possible it did so to stem a much larger, ticked-off tide. Adam Berger, an attorney at Schroeter Goldmark and Bender who handles consumer protection cases, says the corporate motivation for capitulation often comes down to numbers: “In other words, it makes business sense to grease the squeaky wheel, because then there are thousands of other wheels they never have to worry about.”