Buyers club

A buyers club or buying club is a club organized to pool members' collective buying power, enabling them to make purchases at lower prices than are generally available, or to purchase goods that might be difficult to obtain independently.

Buyers' clubs and the AIDS epidemic

In the early days of the HIV/AIDS epidemic, the US FDA was slow to approve potential treatments. As a result, buyers' clubs became quite prominent as a means of obtaining unapproved medications and information about how to help treat HIV and opportunistic infections.^[1] An example of this was drawn to wider prominence with the 2013 film release Dallas Buyers Club.

Scams

The FTC found that fraudulent or misleading buyer's clubs were one of the top three types of consumer fraud in 2011, affecting about 0.6% of the US population every year.^[2]

These memberships are typically sold in the course of selling another product, either with a free trial membership being a condition of making the purchase at the offered price or with a free trial membership being included as a "thank you" gift along with the initial purchase. The customer may not understand what was purchased or may believe that they have not authorized payment for the membership, and yet the credit card used for the initial purchase is billed for the buyer's club membership at the end of the free trial.^[3] According to Iowa Attorney General Tom Miller, "Consumers often tell us they don't recall ever having spoken to the companies, and they don't understand how they can be charged when they have not given the company their credit card number."^[4]

Sometimes, a wide variety of products are promised at a discount, and then once the fee is paid the products are unavailable or not as advertised.^[5] This is particularly true for travel-related buying clubs.^[6]

Global Travel International is a Florida-based buyers club described by The Los Angeles Times as a "controversial but legal" network.^[7] It has been called a "card mill" by industry group American Society of Travel Agents,^[8] and The New York Times said it "will give travel agent credentials to anyone who is at least 18 years old and antes up" enrollment fees plus annual dues.^[9] The company reached a settlement with the Iowa Attorney General in 2015. Under the agreement, the company would refund 2,600 Iowa consumers the cost of their credentials (memberships) for which the AG said the company had been charging consumers without proper disclosure under Iowa's Buying Club Law since 2008.^[10][11][12]

References