ProFlowers Easy Saver Proposed Settlement

We finally found the proposed settlement information of the Proflowers® Easy Saver® Scam class action lawsuits.

http://membershipprogramsettlement.com/index

It contains the items you would expect to see in a proposed settlement offer,

  1. No admission of guilt
  2. A coupon that is not valid for Christmas, Valentines or Mother’s Day or with other discounts.
  3. Attorneys fees
  4. A payment to each of the named plaintiffs
  5. Refunds that you have to apply for.

As happens so many times, first the defense lawyers do their thing, try to dodge or get the case dismissed and then both side agree to settle rather than face the big risk. It’s the cheapest way out, risk is limited and the attorneys who filed the case get paid. The lawyers for the plaintiffs would have taken the case on a contingency basis, that means the plaintiffs probably had to give up certain rights in regard to the timing of the settlement.
Is it all set and done?
No: if sufficient people object or ask to be excluded this will go to trial (or a new settlement proposal will be made).

 

Our thoughts:

  1. No admission of guilt: just the number of people that have complained online would make a reasonable person really question allowing this to be part of the agreement.
  2. Coupon : why would anyone use a coupon after they have had this happen? Easy Saver was just the first pass at this type of membership program, there was at least one other one. The last class action lawsuit had a $10 coupon as part of it’s settlement, this one is twice the size (so this business model must work for them)
  3. Attorneys fees, this is pretty normal, none of the plaintiffs Attorneys have been paid.
  4. Payment to each of the named plaintiffs, these are the people who filed the individual claims that made up the class action, the amounts look to be between $5,000 and $15,000 which is not that much.
  5. Refunds that you need to apply for, this really is a bit rough, they didn’t actually provide a service, the lawsuit said they only billed for one. Someone who has moved or changed email addresses may not find out about this for a year & all the offers and options will have expired by then. No one should have to apply for this refund, it should be automatic.

 

This was a major breach of customer trust and privacy policies, and it really should have been shut down by the credit card companies years before the courts got involved. Pushing for a trial will expose a lot more of the dirt behind the scenes, just deposing the programmers and project managers for the screen changes needed would probably expose what really was planned.

Criminal prosecution: this whole process went way beyond an accident  in programming, it was planned by technical and marketing people who made a plan knowing how customers react and interact with web pages. With so many states being short of funds this would seem to be an easy criminal prosecution with millions of dollars in fines per state. Besides the obvious players in the civil suit: someone at each of the banks and credit card companies would have asked about all the complaints and charge backs, these documents and emails should uncover who knew what when.

Is the money really there?
It really depends on how far up the food chain the pre-knowledge was, and even after it started who knew what when. This problem went on for years; so a great many people would have inside knowledge.

All the companies named in the lawsuit are owned by parent companies which are owned by other companies and at the top of the food chain is the Chairman and Majority owner of Liberty Media®/LibertyInteractive®: John Malone. According to Forbes Magazine(1)  Mr Malone is the larges landholder in the US, (about 2.2 Million acres)  and

the founder and chairman of Liberty Media (LMCA), a major distributor of TV entertainment, sports, and other programming, including Discovery Channel, USA, QVC, Encore, and Starz. In recent years he has successfully spun off businesses and is now free, he says, to spend more of his wealth on land, although it’s not clear how much he has invested so far in his holdings. But he can afford it. After years of wheeling and dealing, Malone is worth an estimated $5 billion. “

Of course that’s just the start of it, besides the Provide Commerce®, ProFlowers®, Shari’s Berries®, Red Envelope®, Cherry Moon Farms companies he also ultimately controls the Atlanta Brave®s and dozens of other companies and web sites that you hear about on a regular basis.(2)(3) Not too long ago he sold off DirecTV® and stepped down as chairman of it’s board.

If Mr. Malone knew about the Easy Saver problem and let it continue those are some really deep pockets, 5.1 billion dollars deep. This was a widespread problem on many fronts, if it triggered the criminal RICO laws that’s triple damages.

 References:

  1. Largest landowner in America:  http://management.fortune.cnn.com/2012/09/27/john-malone-billionaire-landowner/
  2. Liberty Media Holdings http://www.libertymedia.com/asset-list.aspx
  3. Liberty Interactive Holdings http://libertyinteractive.com/asset-list.aspx

 

All the company names listed are the registered trademarks of the respected companies.

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