Senate committee takes on Web-based 'loyalty' marketing companies
Filed under: Ripoffs and Scams, Consumer Complaints, Consumer Ally
Nobody wants to get nailed with unexpected credit card charges in this economy. Who's got money to waste?If you've ever been startled by tiny little charges appearing on your monthly statement that contain the words "rewards," or "club" you swear you didn't pay for, there's a fairly good chance you've done business with Webloyalty, Vertrue or Affinion, though you didn't know it at the time. A boatload of consumers are with you.
And that's why these three companies, all privately owned, half an hour drive from each other on I-95 in Stamford and Norwalk, Conn., recently found themselves the subject of an investigation by the Senate Commerce Committee. From what I've heard, they haven't been particularly cooperative so far.
But when it comes down to it, none of them have had to be. The FTC really hasn't done much, despite some excellent suggestions.
In the past, Webloyalty has acted as if it had something to hide, developing something of a reputation over the years for trying to bury negative information about itself -- though its efforts to do so with an investigation we did at Consumer Reports Webwatch in September 2005 led to what could live today as a lesson for companies about how not to go about this sort of thing.
Hint: Don't publish a client list on your Web site if they've hired you to SEO their bad results off the first page of search returns. Take the lead from Kekst, the PR company Webloyalty (and AIG) hired. They're known for not publishing client lists.
However, Webloyalty may have learned from past mistakes. Webloyalty's corporate PR office e-mailed me after I Twittered that I was looking for former employees of these three companies -- no luck, I probably would have done better hitting some of the bars in downtown Stamford -- to ask if I needed anything.
I wanted to know: How is the company considering changing its practices in light of the congressional investigation? "Although the incidence of individuals who appear to have clicked through our process without reading what they were doing is quite small as compared to all of our members, even a few is too many," Beth Kitchener, Webloyalty's vice president of corporate communications, said in an e-mail exchange. "The class action lawsuit settlement as well as the issues raised by the Senate Commerce Committee put an exclamation point on the need to get this number as low as possible."
As of Aug. 1, Kitchener said, one key change is that Webloyalty "now require[s] customers to enter the last four digits of the credit card they used for the purchase they just made from our marketing partner to confirm they want to charge that same card for a Webloyalty membership. If they enter a number that doesn't match, we don't sign them up."
That seems to be a step in the right direction. Many consumers take requests for surveys and $10 rebates after a transaction as coming from the Web site they just did business with, which could be Chase or Orbitz or some other well-known brand, and don't expect some kind of quasi-identity-theft in the background, even if they enter some blow-off e-mail address just to get to the next screen.
An extra step requiring the consumer to actually part with credit card information a second time, should make a difference. Interestingly, Kitchener said, "None of our competitors have adopted this form of affirmative consent. We hope they will follow our lead."
So: Let's ask the same question of Vertrue and Affinion. Is Webloyalty right? Or are you changing your practices? How? More next week.
Reader Comments (Page 1 of 1)
9-16-2009 @ 6:18AM
michelle said...
I have dealt with Affinion in the past. They go by the names Great Fun, Traveler's Advantage, and about 20 others. Just look at rip-off report to see the depths of their depravity. When you buy an online flight, movie, magazine subscription, etc., a screen will come up asking you if you want to "save 20% on a rental car" or some other thing. IF YOU CLICK (only CLICK) on it to look at it and close it out because you don't want the service, they STILL take your credit card info from the info you gave the airline or whatever you bought. Our first time was a "customer loyalty" check from Budget that Budget told us to expect as we were frequent renters. We lost a couple hundred dollars before we caught it. Just TRY to get your money back in between the hang-ups from them. THEN, when I KNEW about the scam they got me a different way....thru the airline. They are insidious, sick, and twisted criminals who deal on the fringe of the law. I don't care what the employees have to say about it either. You will see when you try to get your money back. Don't be a victim. Check your credit card frequently in the months following an online purchase and look for suspicious charges for Great Fun. That is Affinion. They have been hit with 3 or 4 class action lawsuits already in California and ordered to pay out around $200 million. Please be careful.
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9-16-2009 @ 8:08AM
Ellen said...
I closed my account with Chadwicks after several years of buying clothes from their catalog because of a " rewards program" that I mistakenly thought was from them. I wrote letter after letter to say I had inadvertantly signed up for something I realized was not from them but was told in no uncertain terms "sorry about your luck". I refuse to buy from Chadwicks any longer until my $100.00 is refunded or a credit given. I should have read between the lines, but I truly feel it is not good business.
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9-16-2009 @ 10:32AM
har223 said...
It always benefits the company, not the customer.
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9-16-2009 @ 10:32AM
Mark said...
To call them sleazy would be overly generous. Criminal would be a much more appropriate term, and you could also add shameless to the description also. I would not trust any of these sleazeballs as far as I could throw them. It is too bad the public is so stupid, which, of course, is what they thrive on.
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9-16-2009 @ 8:02PM
Anon said...
When you get ripped off, always check to see if your bank can help you file a claim of fraud. Usually, the bank will give you back what you lost and go after the offenders themselves.
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9-17-2009 @ 7:58AM
Coffeelady said...
We have had a BP Visa card from Chase for many years and the rebates are great. Of course, they just put a limit on the rebates from gas purchases, but I get rebates on almost everything. You can get it in debit cards for use at BP or some that can be used anywhere, I believe. I always get the BP cash cards. I charge almost everything on the card and pay it off at the end of the month. But you have to be disciplined not to incur finance charges to make this a good deal. I have received hundred of dollars in rebates over the last 3 years.
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9-17-2009 @ 8:10AM
lei said...
i agree w/ellen. l.a. fitness (nationwide) scams the members thru the 'backdoor'. once you get your membership, later they slid in the 'training 1on1' program. yeah, you get a complimentary once or twice session, you like it sign up then realize it's too costly or inconvenient. then wholla they have your credit cd.# , you try to cancel within the 3 day clause but wait something else tacks on 'your signature on file'. a different contract all together is concocted. months go by 'oh, it'll be credited next month, etc. etc. to no avail. be careful w/ training contracts at the gym's usually they're a private contractor.
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9-17-2009 @ 8:07AM
operator said...
these credit reporting companys should be charged with slander
and theft of the american public..
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9-17-2009 @ 11:35AM
Kim said...
When you swipe a rewards credit card the company that you are buying from is the one that is paying your reward. A fee goes to the bank the company banks with, % to the cc company & % to whatever the reward is.
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9-17-2009 @ 8:07AM
Dunmovin said...
Great Fun is what these thievin scammers are havin with YOUR money after they steal it from you!
Look here http://www.consumeraffairs.com/scam_alerts/trilegiant_complaints.html
to see thousands of complaints from victims of these scumbags
KEY to getting the spurious charge removed from your bill is to tell your credit provider "I don't recognize this charge. I didn't authorize it and I want it removed please. It is a scam."
Don't patronise businesses or banks that collude with these thieves and write letters to TELL EM why!
Don't bother to waste your time with the scammers -- THEY don't care! they're SCAMMERS!
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9-29-2009 @ 10:01AM
Mary said...
Ellen:
I read the comments you posted on September 16, 2009. It’s important to me that your concerns are addressed. However, I don't know how to reach you. If you would like my assistance, please contact me at mary@webloyalty.com.
Thanks,
Mary
Webloyalty.com Consumer Affairs
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10-01-2009 @ 10:34PM
Tara said...
I used to whine about the APR's, about the system that lowers your credit score if you check it too often and look out for better deals, all the fees and so on. Then I decided to simply pay off my debt and never use credit cards again. If I need some extra cash, I can always get it on the net. There are so many ways to GET not make money online - even $1000. http://www.mediancs.com/rd_p?p=192462&t=9534&a=25081-scash&gift=25081 It works for me, I am debt-free.
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10-01-2009 @ 3:25PM
mcbetty652aol.com said...
I got taken in last Dec. I opened a window for a Walmart gift card, and was suddenly thrust into a web page asking "what my interests were." I ticked crafts, reading, and some others. Then I got an overdraft notice when I should have had a reserve balance. Then I got my statement and found at least seven Clubs listed, with first month charges if $12.95-39.95. I immediately started calling the universal phone numbers listed. The rep usually tried to get me to take some additional 'gift" or "rebate;" but when I held firm, my money was refunded except for one company. They still owe me $12.99. Unfortunately I had to pay the overdraft charges. I had saved the original e-mail, so I went back and printed out the page. What hadn't shown up on screen was a page and a half of network affiliates, written in everything from French to Chinese (in characters). Now I don't even respond to familiar companies. I call their customer service line to do business.
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