Twenty-two states allege that FTD and Classmates.com took advantage of their customers through deceptive billing and advertising practices, said FOX4KC.com last week. The companies will pay $11 million in settlement costs to avoid litigation.According to a spokesman for the Kansas Attorney General Derek Schmidt, an investigation uncovered that FTD and Classmates.com shared confidential customer information, including credit card data, with a third-party marketing company. That marketer then promoted other businesses including travel rewards programs and discount buying clubs to FTD and Classmates.com customers through pop-ads on the sites. The investigation revealed customers didn’t know they were leaving the original sites or giving their credit card information to a third party.In a statement by the Illinois Attorney General Lisa Madigan, Classmates.com and FTD used negative option marketing practices to sell membership programs to customers. A negative option marketing practice is a sales practice where the seller interprets a consumer’s failure to reject an offer or cancel an agreement as approval to charge the consumer for goods or services.In a formal statement by FTD to FOX 4, FTD admitted no wrongdoing and said it discontinued a relationship with one of the third-party marketers more than five years ago. FTD also said it was not fined or penalized, but instead entered into a voluntary settlement to cover $2.8 million in investigatory costs to the 22 states involved.In the case of Classmates.com, Classmates.com was accused of tricking customers into paying for subscriptions after the expiration of free trials. Investigators believed that, in many cases, customers did not realize they would be automatically billed at the end of the free trials. In addition, investigators said that cancelling the subscription was often difficult. Classmates.com has agreed to cover its share of investigatory costs, as well as pay $3 million to people who were unfairly charged for a subscription.In addition to a total settlement by the companies of $11 million to 22 states, Classmates.com agreed to tell customers that their subscriptions automatically renew and to make it easier for subscribers to cancel when they wish to leave the social network, said Courthouse News Service.Insider Take:Our take on this is pretty straight forward – deceptive advertising and billing practices are not acceptable. Obviously, they hurt the consumer, but they hurt subscription companies too, making it harder for us to earn our customers’ trust.To re-earn that trust, our business practices must be above aboard and transparent. Here are four takeaways for re-earning that trust:

1. Make it easy to understand how your subscription operates. Be upfront with everything, including auto-renewal and auto-billing policies. Make this information easy to find, rather than buried in the fine print.
2. Make cancellation simple. If someone has a bad experience canceling, they’ll never come back. If it is simple and painless, maybe they will reconsider if they need or want your subscription later.
3. When customers complain they didn’t understand the policies, give them the benefit of the doubt and issue refunds in good faith.
4. Research your business partners and be sure you understand what shared data they will use and how. They could wreak havoc on your business if they are not truly above board.