Online retailers linked to controversial post-transaction marketers

Posted on August 3, 2009

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Web shoppers have complained that odd charges are showing up on their credit card statements. They discovered that companies have signed up customers to programs and begin charging their credit cards, according to a feature story published on cnet.com.

The tech news website discovered this after one of their reporters found a charge of $12 once a month for eight months on a credit card that was rarely used.
The website reports, “Last November, after almost completing a purchase at Buy.com, Josh Lowensohn was presented with an advertisement that asked him for his e-mail address. He couldn’t quickly find a way to get past the page and said he remembers thinking he would type in one of his rarely used e-mail addresses just so he could complete his transaction. Lowensohn was confident he couldn’t lose anything because the advertiser didn’t have his credit card information.”
It turns out that Buy.com either gave or sold the reporter’s credit card number to a partner known as WebLoyalty, who began to charge the customer a monthly fee.

Buy.com’s privacy statement does say that, “We reserve the right to use or disclose your personally identifiable information for business reasons in whatever manner desired.” Apparently, that includes credit card numbers.

Another quote from the CNET article, “Apparently, many consumers are unaware that for years now, e-tailers such as Buy.com, Orbitz, Fandango, and hundreds of others have given Web loyalty programs, also known as post-transaction marketers, access to their customers’ credit cards. Some online shoppers don’t realize that when they enter their e-mail addresses into these ads, they are opting into the programs and authorizing the charges.”
Other companies who do this are: Vertue, WebLoyalty and Affinion. They are all marketers that make coupon offers to individuals who make online purchases. These companies then charge those individuals who enroll in their loyalty programs through credit card information given to them from the online store that processed the purchased.
“Consumers find this of value otherwise we wouldn’t have it on the site,” said Brian Hoyt, an Orbitz spokesman told CNET. “We’re not in the business of misleading consumers.”
Dow Jones Newswire reports that the U.S. Senate is looking into the issue and will be investigating the marketing procedures of electronic marketing.

If you want more information about this ongoing story, The Consumerist has been reporting on this issue for a while now.  Also, I would go to CNET for an picture of the offer from WebLoyalty from Buy.com. CNET highlights the fine print of the offer and explains it in clear language.

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Posted in: Online shopping