April 28, 2010
-
News: Visa Clamps Down On Data Pass
Several online companies have been slapped for passing customer's personal data and credit card information on to other online marketing companies. Popular sites like Fandango and Priceline partnered with three marketing firms, Affinion, Vertrue and Webloyalty to deceive shoppers into signing up for free trials or club memberships which allowed them to pass on the customer's credit card information. When a consumer was closing a sale on the merchant's site, a popup box occurred that would lead the shopper into believing that by clicking "yes" they are accepting a free trial offer or cash back on future purchases. In reality, the consumer was clicking "yes" to allow his/her debit or credit card information to be passed on to one of the three marketing firms, Affinion, Vertrue and Webloyalty. The process is called "data pass."
Several states' attorney generals have taken action against Affinion, Vertrue and Webloyalty and pressured online merchants to sever ties with such companies. Most concerning for lawmakers is that once the consumer became aware of the charges on their credit card statements and notified the company to stop the charges, they were unsuccessful. It has taken them several calls and several months before the issue was resolved. In some cases, consumers had to close the credit card account to eliminate the problem. The U.S. Senate Commerce Committee led by U.S. Senator Jay Rockefeller released a report in late 2009 which indicated that theses three companies had cheated more than 35 million online consumers out of over $1.4 billion over the past ten years. In response, Senator Rockefeller expects to propose a law that will ban the practice of data pass.
Meanwhile, with the insurmountable and blatant evidence, one might have thought that giant credit card networks would have taken their own action in clamping down on these intruders. Six months later, Visa has finally stepped up to the plate. The company announced that it has joined the fight against these types of deceptive practices and will take action against any company that accepts the Visa card and participates in data pass. As of May 1st, Visa said it will no longer allow companies to pass card information on to a third party. Rockefeller calls it a victory.