July 28, 2009
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News: Emarketing Firm Subpoenaed
Senator John D. Rockefeller IV (D-WV) issued a plea to three online companies to release documents relating to possible deceptive credit card practices. The companies, Vertrue, WebLoyalty, and Affinon have been asked to cooperate with the Senate Commerce Committee in the ongoing investigation. Although all three companies have been implicated in the credit card abuse charges, Senator Rockefeller has only issued one subpoena to the Vertrue Inc. organization. The three organizations considered to be discount clubs claim to give cash back and rewards to anyone who enrolls in their clubs. The three organizations use pop-ups to get the attention of consumers whenever they use their credit card to make a purchase on sites like Priceline.com, Fandango.com, Orbitz Worldwide Inc., and Staples.com. In return, these retailers receive a bonus for each new account resulting from its website.
When a consumer enrolls in the program, they are not asked to provide any credit card information and therefore are not aware that their account will be charged. The pop-up asks for an email address to claim the rewards and in fine print explains that the host company (Priceline.com, Fandango.com, Orbitz, and Staples.com) will be supplying the discount club with the consumer's credit card information. Consumers who carefully examine their card statements discover the unauthorized charge and notify their lender. Consumers who don't carefully monitor their statements could find themselves out hundreds of dollars before discovering the charges. Most card contracts set deadlines for disputing charges. Any charges not disputed within the time frame will not be recovered.
Senator Rockefeller, the Senate Commerce Committee Chairman, gave Vertrue's President, Gary Johnson, until August 18th to produce the subpoenaed documents relating to the unauthorized credit card charges or face the committee for questioning. Vertrue is owned in part by One Equity Partners that manages an investment fund for JPMorgan Chase, and in part by Rho Ventures, an investment company the runs the $510 million Rho Ventures VI investment fund.