U.S. Senate begins investigation into post transaction marketing
It seems some big name online retailers thought it would be okay to trick consumers into giving their credit card information to third-party vendors. The United States Senate is letting them know they thought wrong.
The U.S. Senate Committee on Commerce, Science and Transportation has launched an investigation into an activity known as “post transaction marketing.” According to CNET, this is an activity where consumers are encouraged to enter their email address during checkout with an online retailer to join a loyalty program. The page looks like it comes from the retailer themselves, but in reality is backed by a third-party vendor, and buried in their fine print is the little nugget of information that says there is a monthly fee that will be charged to their credit card for signing up.
Consumers that have been duped by this tactic will then find odd charges on their credit card they are unfamiliar with, and the charges will continue to happen until the customer catches on and cancels the transactions. Some customers have caught it right away, and others reportedly didn’t catch it for years.
Post transaction marketers Vertrue, Webloyalty, and Affinion are said to have generated more than $1.4 billion by “misleading” Web shoppers, and $792 million of that was paid out to the online retailers that participated in the scheme.
The most disturbing part of this whole sordid tale is that wasn’t small time retailers that were involved, but instead was major retailers, airlines, dating sites and more. You can see the full list by clicking here, but some of the names you’ll recognize include 1-800-Flowers, Barnes & Noble, Buy.com, Classmates.com, eHarmony, Priceline, Time Life and many, many more. These weren’t exactly small time retailers that were doing this to their customers.
Vertrue and Webloyalty have already changed the policies so that consumers have to enter at least some credit card information to make it clear they will be charged. Affinion has not yet issued a statement.
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