January 28, 2010
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News: Retailers Under Fire
Trouble's not over yet for the three e-marketing companies that were recently accursed of deceptive practices scamming credit card customers out of millions of dollars. The New York States Attorney General, Andrew Cuomo has begun a full fledged investigation into the alleged abusive marketing practices toward credit card consumers. Cuomo's office has subpoenaed the records of more than 22 online merchants which include Staples, 1-800-Flowers.com and Orbitz. The investigation stems from charges associated with Webloyalty, Affinion, and Verture who purchased credit cardholders information from the online merchants and mislead consumers into thinking they winning prizes or coupons. All the while, the three companies were charging the customer's card accounts on a monthly basis and making it very difficult for the customers to get the charges to cease.
Customers would receive a pop-up message from one of the three marketing firms saying they have been awarded a special discount or coupon. When the customer clicks yes to accept the coupon, the merchant turns over the customer's credit card information that was just received to process their purchase. Buried in the terms of agreement, the customer is told he is signing up for the membership and a $20 a month fee will be charged to their credit card account each month. Other merchants connected to the deceptive marketing companies are Continental Airlines, Priceline, and Buy.com.
The three marketing companies have maintained that the customer is well informed that they are signing up for the membership; however a U.S. Senate Commerce committee investigation concluded that the majority are unaware that they have been signed up. Many, in fact, do not even realize that they have been duped until they notice the unauthorized credit card charges on their monthly statement. The investigation also revealed that the marketers know that the customers are not aware that they have signed up for the program. Furthermore, documents indicate that all three of the companies know that without the cooperation of the merchants in selling them the card numbers, their business would be non-existent.