May 26, 2009
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News: Senate Investigates Online Marketing Practices
Have you ever signed up for an online discount club membership with a cash rebate and suddenly notice a large recurring charge on your credit card statement. The new Senate Commerce Committee Chairman, John Rockefeller (D-W.V.) has targeted companies who participate in these deceptive marketing traps and is prepared to end this customer fraud. Senator Rockefeller has launched an investigation into the activities of two online marketing firms that somehow acquire consumers' credit card information and then generate recurring monthly charges on their accounts. Vertrue, Inc. and Webloyalty have been called on the carpet by the Committee to provide a complete list of every e-commerce business or website with which they have a business relationship and copies of contracts or other agreements with those retailers. Vertrue Inc is an online marketer of affinity and loyalty membership programs. Their business partners offer healthcare, security and credit card protection services, shopping programs, personals and foreclosure home sales. Webloyalty partners with some of the Internet's most popular sites, like Priceline.com and Orbitz, and offers membership programs to their online customers.
The investigation was sparked by a surge of complaints to the Better Business Bureau (BBB) that consumers have been receiving monthly credit card charges they did not authorize. Complaints have become so numerous that the BBB has downgraded both companies to an unsatisfactory status. In response to the allegations, a Vertrue representative has stated that the company has followed all guidelines and is confident the investigation will prove this fact. Webloyalty also says they have met all standards. The complaints say that customers receive a pop-up window offering a cash rebate if they purchase a membership. Customers give their email address and credit card information and later notice a recurring monthly membership charge on their account.
The Commerce Committee is also questioning how the companies so easily were able to obtain the customers' credit card information in the first place. In order to determine the validity of their disclosure information, Rockefeller has asked to see all of the two companies written instructions and communications with the banks and card companies. Additionally, Rockefeller has demanded statistics on all consumers who have signed up for the memberships including how many have actually received a cash rebate and the length of their memberships. Both Vertrue and Webloyalty say they will cooperate fully with the committee's investigation.