Settlement in DirectBuy Class Action Lawsuit

Several months ago, I wrote a post about the questionable value of a DirectBuy membership.  My conclusion was that while it may be a good deal for some people, there are a lot of details that a potential member should consider before signing on the dotted line.  Recently I received a legal notice in the mail with details of a pending settlement in a class action lawsuit against DirectBuy.  (United States District Court for the District of Connecticut).

At issue, according to the plaintiffs, is that DirectBuy should have, but did not, disclose that they receive certain financial benefits from some of its suppliers.  The plaintiffs contend that these benefits, such as early payment discounts and volume rebates, should be passed on to DirectBuy members.  Full details of the plaintiffs’ claims and a copy of their complaint are accessible by password only.

DirectBuy denies any wrongdoing but has agreed to a settlement in the case which amounts to a brief period of free membership for current and past members (length of the free period depends on the member’s status).

Documents have been mailed to the parties affected by this class action.

It must be noted, however, that this settlement only affects one class action.  There are other class action lawsuits pending.  Former and current members should examine all of their legal options closely before agreeing to any settlement because accepting a settlement forfeits rights to other claims.

17 responses on “Settlement in DirectBuy Class Action Lawsuit

  1. Directbuy Scam

    Yet another Directbuy lawsuit recently filed:

    Desert Buy Palm Springs Inc v. DirectBuy Inc et al
    Ninth Circuit California Central District Court
    Filed: January 13, 2011 as case 5:2011cv00107

    http://dockets.justia.com/search?q=DirectBuy+Inc

    It is really bad for Directbuy, the FRANCHISOR, to keep and retain all discounts and rebates and any other price reductions by specific agreement with the franchiseEE without the franchisOR or the francisEE informing the potential member (and existing members) that they do so, especially since all merchandise must be paid for in advance and all members are led to believe that they are receiving all discounts and rebates.

    http://wvrecord.com/news/232893-mcgraws-office-files-suit-against-directbuy

    West Virginia Record
    CHARLESTON – Attorney General Darrell McGraw has filed a suit against DirectBuy

    So you think you are getting a great deal?

  2. Helmar Heckel

    We were members ofdirectbuy for several years. We are not currently. How do we get access to the 1 or 2 month free membership?

    1. Thumb&Hammer Post author

      You should receive a notice in the mail if you are affected by this or any other class action suit. Whether or not you are affected depends on when and where you were a member of DirectBuy.

  3. Narjis

    I too recieved the legal notice stipulating a settelement of free memberships for a couple of months. I am just wondering how many class actions are there against Direct buy? would love to know and accordingly make a decision.

    1. Thumb&Hammer Post author

      If you received the notice, you have the password to access the website that contains the actual documents. The website also contains the documents for the other class action suits currently pending. For example, there is one class action specifically for residents of California. The suit that I speak of here deals with DirectBuy not sharing discounts with members. Other suits have been filed for the (blatent) fraudulent claims of savings for members. It would all depend on where you live, when you joined and when your membership was active. If you joined recently (within the statute of limitations) you may even consider filing your own class action and look for something better than two months free membership. Speaking for myself, if I wasn’t beyond the statute of limitations, I would be looking to recoup some of the thousands of dollars it cost to join in the first place. Remember that if you do nothing, you accept the settlement that is offered. Consider your options carefully.

  4. class action suit

    It is nice of them to settle on the free membership for past and current users to make up for the lack of discounts and such. However, it is confusing why they are doing this if they claim that they have done nothing wrong.

    1. Thumb&Hammer Post author

      It’s cheaper than going to court. Definition of settlement: Paintiff says, “I want thousands of dollars.” Defendant says, “I didn’t do anything wrong, but I’ll give you a couple of dollars now if you just go away.”
      By settling a class action, the company avoids having hundreds or thousands of individual suits filed against them by individual plaintiffs.

  5. Leo

    Please How do I get in on this class action lawsuit, i have been a member for a year and i have not been able to find any thing affordable at directbuy and most of their pricing is not better than regular retail stores. Now they are taking me to collections even though I have told them to abrogate my contract and refund all the money i paid to them without any benefit.

    Please help with info on how I can get in on this class action suit

    1. Thumb&Hammer Post author

      The particular lawsuit I was referring to wouldn’t do you much good. The settlement allows for an extension of your membership if you are currently a member or a two month membership if your membership has lapsed. Personally, I found it to be pretty insulting. The first comment in this thread contains a link to a list of DirectBuy lawsuits. ) Otherwise, you may want to try a Google search.

      In your case, and by no means would I recommend you take legal advice from me, I would consider consulting a lawyer who might have access to information about pending class action suits. You may also consider filing your own action, since your credit rating is at risk.

      Keep us posted, either here while the comments are still open, on the forum, or by email.

  6. Jack & Carolyn Birdsall

    We too were duped into purchasing a Direct Buy Membership and it was a huge rip off. We place and order for flooring and a door and they were to let us know the name of someone who would install the door. They never called or returned our phone calls. Also, we found some items cheaper in the store that what they had in their catalogs and they refused to adjust the price. They just said, if you can buy it cheaper elsewhere, go ahead. They also told us they would be opening a Direct Buy in Miami in August. Never happened. Buy the time you factor in the travel time and having to pick up your items at the warehouse, you didn’t save. They also did not notify us when our renewal was due and when we went to order bedroom furniture online, we found we no longer had an active membership. The thousands we paid may as well have been tossed in the trash or burned. Extremely bad experience. We also received a notice in the mail, but lost it. Is there anyway to still take advantage? I really irritates me that we wasted all that money. We are in the process of installing impact windows and doors, replacing the roof, etc…. and would like to see if we an recoup some of our money. Thank you.

    1. Thumb&Hammer Post author

      If you were part of the same class action, the case is “Wilson v. Direct Buy. The website url is http://www.settlement-direct.com. If you don’t have the password they sent you, you’ll be able to recover it if you still have your membership number. If I remember correctly, the deadline for responding was in March, so if it hasn’t already passed, you don’t have much time. Good luck, and I hope you get some value out of the settlement.

  7. Francisco Hernandez

    I also was duped into buying their membership due to their high savings and quick sales pitch here in Texas. I found that the one here in North Texas doesn’t belong to Better Business Bereau and opened a complaint, BBB opened and closed it admin. I went back a month after trying to get my money back the day after I signed to match prices from fliers I gotten from Conn’s and Fry’s and two reps that help me to match price they couldn’t find anything of the 4 items I need it at the price Conn’s offered. One rep told me that it didn’t seem like this was for me and is not going to work out the way I wanted. The other rep said that the sales man should of explain better and someone from corporate would be contacting me about matching prices on items they carry in their catalogs, as of today a month later no one has contacted me. I want to know if anyone knows of a class action lawsuit here in the Dallas area or want to open one up.

    thanks in advance!

  8. JAMESON

    Just because certain manufacturers give discounts if a bill is paid in full by a customer doesnt entitle a member to those discounts…If direct buy didnt pay the bill early then the discount isnt applied. would members pay late fees if the direct buy club happens to pay the bill late…it works both ways and its just an example of lawyers looking for ways to get money from legitiment companies to pad their own wallets…i bet the lawyers took home plenty of earning from this class action lawsuit and the people named as plaintiffs only received a few month memberships for free….so who really are the crooks and who really benifited from this lawsuit…. think about it

    1. Thumb&Hammer Post author

      Your point is well-taken, except that full payment is required at the time that the customer places the order. DirectBuy implied in their literature that members receive direct-from-the-manufacturer pricing. Therefore, if the manufacturer offers discounts, for whatever reason, the member should be entitled to those discounts. Thus,any early payment discounts *should* be passed along to the member.
      DirectBuy, as a company, is sllowed to make money. They do this by recruiting members– charging thousands for initial membership fees plus annual renewal fees. The common thread of the lawsuits I’ve seen is issue of the level of deception the company uses in recruiting those members.

  9. Jeff

    The lawsuit is a bit confusing. My membership ended March 31st but the suit considers me a member as of the january deadline so I only get the 2 months which is kinda useless. Would rather have been deemed a past member as it seems their deal is better.
    10 years of membership & I can honestly say I have not even recovered half of the fees in savings.
    Plus the whole pay up front is insane. I pay $2000.00 cash to wait 3 months for a couch. I can go online & purchase things with a credit card but when I go in to order I am forced to pay cash.
    When we originally signed up the pressure was immense & savings were highly overinflated. Plus I was shocked this past year when I received the notice telling me my 10 year membership was up & I would be forced to buy another to continue. Guess I should have read the fine print on the contract but the salesmen also have a duty to explain things as well, which they did not.
    Most electronics can be bought on sale @ the big stores for cheaper when you factor in the shipping costs & driving. Furniture is questionable to buy because until you’ve actually sat in it or laid on it how would you know if it is for you? Flooring, cabinets et all seem way too pricey for supposedly at cost.
    I have never been happy with the savings, communication of changes or really anything to do with Directbuy.

    1. Rosalyn Diggs

      I joined Direct Buy March 2011 and did receive the letter concerning the class action suit but misplaced it before I had the chance to fill it out. Can I still be included in the lawsuit??

      1. Thumb&Hammer Post author

        In the settlement that affected me, there was a time limit of a few months within which the award had to be claimed. I can’t remember the exact details as it was two years ago, but I believe we had until June (after being notified in January). But you were probably affected by a different class action since you joined AFTER the settlement mentioned in this post was reached.

        There were a number of other class action settlements and cases pending two years ago and it appears that there is still quite a bit of legal action now. Just do a Google search for “direct buy” or “directbuy” and add keywords like “class action lawsuit 2013″ or a variation of that. Also try adding your state (or province) to the search terms.

        Keep in mind that you only have a limited amount of time to take action on any settlement and once you accept a settlement, you forfeit your rights to any future claims.

        I wish I could help you out more. The amount of litigation against this company is staggering. Good luck to you.