Vistaprint N.V. said Monday it has ended its contract with a unit of Vertrue Inc., a consumer marketing company that has had many consumer complaints over the way it sells memberships to discount clubs.
Vistaprint, based in the Netherlands with U.S. headquarters in Lexington, Mass., sells customized business cards, calendars and other small items to small businesses and consumers. Vertrue, based in Norwalk, Conn., charges members a monthly fee for access to discounts.
Vistaprint and Adaptive Marketing LLC, a unit of Vertrue, were sued last year in a class action brought by consumers who felt they were deceived into buying Vertrue memberships after they paid for a product they bought on Vistaprint's Web site.
The lawsuit, consolidated in federal court in Southern Texas, alleges that consumers were asked to complete a survey as a "special thank you" and receive $10. Later, their credit or debit cards were hit with $14.95 in monthly discount club membership fees and if they asked for a refund, would allegedly get the runaround although several did get their money back.
The companies argued that the offer asked consumers to agree to the terms of the promotion, which spelled out such fees.
The court agreed with Vistaprint and Vertrue and dismissed the lawsuit in August.
But Vistaprint said ending its relationship with Vertrue was prudent, given hearings into consumer disclosures in membership rewards programs held earlier this month by the Senate committee on Commerce, Science and Technology.
Vistaprint said the relationship with the Vertrue unit will end on Dec. 20 and that it has stopped offering membership rewards or similar programs last week.
Despite the loss of revenue from Vertrue, Vistaprint affirmed its earnings and revenue forecast for the fiscal second quarter ending Dec. 31 and full year. Vistaprint expects revenue from membership programs to decline over time and might stop completely by the end of calendar 2010.
Membership revenue comprised 2.3 percent of revenue in the first quarter, down from 6.2 percent in fiscal 2008.
Shares of Vistaprint rose $2.45, or 4.6 percent, to $55.55 in morning trading.