Rockefeller takes on aggressive online sales tactics, report finds firms misleading consumers
Sen. John D. Rockefeller (D-W.Va.) said that millions of online shoppers may be unknowingly signing up for membership clubs that are bilking consumers with mystery fees that show up on their credit card bills.
Rockefeller, chairman of the Senate Commerce, Science and Transportation Committee, released a report from an investigation and is conducting a hearing Tuesday morning (now) on what he says are deceptive practices that have affected more than 30 million Internet shoppers and have raised as much as $1.4 billion in revenue for marketing companies such as Affinion, Vertrue, and Webloyalty.
“After six months, this Committee has found that the companies we are investigating have figured out very clever ways to manipulate consumers’ buying habits so they can make a quick buck. American consumers have been complaining for years about these misleading practices and asking for answers -- and rightly so,” said Chairman Rockefeller. “Millions of Americans are getting hit with these mystery charges every month -- we have to do all we can to protect the hard working families relying on us to look out for their wallets and well-being.”
Here are some key findings from the investigation:
-- Three Internet firms -- Affinion, Vertrue, and Webloyalty -- exploit consumers’ expectations about online shopping to trick them into joining their membership clubs.
-- Consumers often do not know these companies have their credit card numbers until they start seeing charges on their bank statements.
-- Affinion, Vertrue, and Webloyalty and their e-commerce partners have earned more than $1.4 billion in revenue with their misleading tactics.
-- There have been more than 30 million consumer enrollments in these clubs and several million people are unknowingly enrolled in these clubs at any one time.
-- More than 450 e-commerce Web sites and retailers have partnered with Affinion, Vertrue, and Webloyalty to employ aggressive sales tactics against their online customers, splitting the revenue about 50-50.
-- Almost no one receives the “cash back award” that Affinion, Vertrue, and Webloyalty offer to online consumers at the time of enrollment.
November 17, 2009; 10:49 AM ET
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