Senate To Air Findings In Web "Mystery Charge" Probe

CNet reports on hearings scheduled to open tomorrow in the US Senate on mysterious charges on thousands of consumers' credit cards. The Senate Committee on Commerce, Science and Transportation has been investigating online loyalty programs, which shoppers encounter (often with little comprehension) on the sites of online retailers such as as Continental Airlines, FTD, and Classmates.com. "At the center of the federal probe are Webloyalty, Affinion, and Vertrue, companies that make 'cash-back' and coupon offers to consumers and charge them monthly fees to enroll in their loyalty programs. ... In August, as the government's investigation rolled on, Webloyalty announced that it would alter its ads to require that consumers 'enter the last four digits of their credit or debit card to confirm' they wish to pay the membership fees. Last week, Affinion made similar changes. During the hearing, when the Senate committee is expected to make public the results of a six-month investigation, it will also likely say the alterations made by Webloyalty and Affinion don't go far enough. "

Comments

It's a mystery

[aflag]

I gave some dubious site my credit card and my money mysteriously went missing.

Re:It's a mystery

[Anonymous Coward]

No worries. I bought this leprechaun a beer and he told me funny things like where to start fires and such. And, now my pants are missing.

Re:It's a mystery

[Old97]

The "dubious" sites are well known legitimate businesses who pass your credit card information to their "partners" without asking your permission. So unless you consider all commerce on the internet to be "dubious", you've misunderstood the problem. Imagine if you used your credit card at a brick and mortar Best Buy store and they signed you up for AOL based on your signature on the charge slip - without explaining first what they were doing and insuring you understood. Oh, yeah, they've done that too.

Re:It's a mystery

[pyster]

Cheap tickets passed my info along to webloyalty. I was billed, but was able to get the charges reversed by webloyalty with no issues. Classmates.com has also been known to do crap like this.

Re:It's a mystery

[thePowerOfGrayskull]

Not really. A great example is when you get tickets via Fandango: at the end of the sale, you get a "save X on your purchase! click here for details!" If you do, you get taken to the web site where you have to sign up. When I looked it was pretty clear that I was signing up for a service that I would need to pay for. I didn't want it, so I didn't find out if there was additional work needed to re-enter credit card, etc... probably not, but that really doesn't matter. There's not really any question that you're signing up for a separate service and that it's not free.

Re:It's a mystery

[blueskies]

If i don't have to enter my CC number i don't care if someone has one my my generated throw away email addresses.

The image you present actually spells it out much better than other sites have.

I don't think filling in an email address should constitute getting charged to your CC. Maybe the best bet is to keep signing up for these and refusing the charges?

Re:It's a mystery

[ukyoCE]

Thanks for the link. The key problem with that page, to me, is that the Yes button specifically is surrounded with misleading text.

It says "YES, I want discounts and $10".

not "YES, I want to sign up for the reservation rewards service"

Along with (previous to changes) repeatedly referring to it as a "reward" instead of as a for-pay service.

The rest is a pile of small text meant to overwhelm the customer who isn't the least bit interested in reading a book about a service they've never heard of. They're looking for the "ignore and continue" button. If it says "Continue and get $10 free", then yeah, most people will click that button.

I've never made the mistake myself, but most people aren't as cynical and careful as slashdotters are.

Re:AHA!

[Narpak]

At this rate i bet bernanke was secretly a really good fed chairman...we just havent realized it yet.

Indeed. Unbeknownst to the general public Bernanke managed to repeatedly dissuade our alien Lizardfolk overlords from adding more secret taxes to your online transactions. In truth he is one of humanity's greatest heroes!

CNET can't spell

[michelcolman]

It would alter "it's" adds?!

Re:CNET can't spell

[ta bu shi da yu]

But what does it all add up to?

Re:CNET can't spell

[michelcolman]

I could pretend I misspelled "adds" on purpose, of course, saying I was going for the "funny" mod points. Would that work? ;-) Embarrassing indeed, now I just hope I did'nt make any spelling errors in this post... d'oh!

Re:CNET can't spell

[elrous0]

I've got a Ph.D. and still make that mistake from time to time. Even though I know better, it's still easy to slip up. I also still screw up there/their/they're too, even though I know damn well the difference between them. And I can't spell "necessary" to save my life without a spell checker. There are just certain aspects of the language that tend to screw us up, no matter how much we study the language. Something about homophones in particular seem problematic (maybe because we unconsciously "sound out" the language in our heads as we type).

Re:CNET can't spell

[thePowerOfGrayskull]

There are just certain aspects of the language that tend to screw us up, no matter how much we study the language.

Pfff. Speak for you're self, mortal.

Re:CNET can't spell

[elrous0]

Immortals excluded, of course. You are perfection, my lords.

Could be fixed with a simple law.

[purpledinoz]

A law that explicitly disallows merchants to give credit card information to another party would fix this problem. If the merchant forwards you to another party, then the user must enter the credit card information again.

Re:Could be fixed with a simple law.

[bigmouth_strikes]

I'm not sure that would benefit consumers greatly, since many are having a hard time already filling out forms when purchasing stuff. Also, the more forms there are, the more points of exploitation there will be as well.

Perhaps merchants should be forced to inform by email or preferably by snail mail when and why they share information, much like is done when companies ask for a credit report on you (at least where I live).

Re:Could be fixed with a simple law.

[SharpFang]

There is no such law?
So what is there to stop a gas station owner in backwater Kentucky to publish my CC number online? ...scary...

Re:Could be fixed with a simple law.

[MobyDisk]

I cannot think of any case where I want any company to give away my credit card information. I think most people assume this is illegal already. This is why virtual account numbers are such a good idea - it compensates for an inherently flawed system.

Re:Could be fixed with a simple law.

[vadim_t]

Why? It's perfect.

Having to enter the card number a second time would make people suspicious. I'd probably stop right there. In any case it's a considerable hassle, so I'd shop somewhere else.

It'd have the very nice side effect of killing such programs, due to having one being probably a loss instead of a profit.

Re:Could be fixed with a simple law.

[SharpFang]

Oh, the more forms there are, the more likely the customer won't make the purchase. Which encourages the sellers to limit the number of forms, which connected with this kind of laws would simply make them give up such shady practices whatsoever.

Re:Could be fixed with a simple law.

[purpledinoz]

I'm sure there's a law prohibiting companies from giving away credit card information without your consent. But these websites get around this by showing customers a consent form, where the customer enters his/her e-mail address, which contains the agreement in fine-print, which no one reads. If you explicit disallow the merchant from transferring information, regardless of consent, then I think it would solve the problem.

Re:Could be fixed with a simple law.

[purpledinoz]

I also cannot think of any case where I would want to save the 20s it takes to fill in my credit card info. The benefit to the consumer is, by entering the credit card information again, the consumer knows he/she is being charged for something. Usually, consumers want to know what they're buying, so they would pay much more attention.

Re:Could be fixed with a simple law.

[MickyTheIdiot]

I'm also tired of hearing how hard it is to fill out an online form to buy something. It's a very quick process. If it's too hard maybe they should stick to brink and mortar stores.

There is no good reason for a store to give out your credit card info to someone else EVER (except to the credit card processor).

Re:Could be fixed with a simple law.

[conlaw]

In my experience, it hasn't been the merchants doing these add-ons; it's the credit card companies themselves. For instance, I call BigBank, the issuer of my Visa card, to make sure that my last payment was credited on time. I'm transferred to a customer rep who answers the question and then says, "By the way, I see that you're entitled to join our travel savings plan ... [blah, blah, blah about the great features of the plan]. You can have a free trial starting tomorrow." If you say anything except, "No, no, no," they automatically sign you up and then, after 10 or 25 days, X Travel Co. starts adding a "nominal fee" of $29.95 ("only pennies a day") to your card. If X Travel Co. is an "affiliate" of BigBank and you failed to opt out when BigBank sent you the notice of its privacy policies, then you don't really have much recourse except to call BigBank, talk someone into giving you the contact information for X Travel Co., and then contacting them to stop charging you.

Re:Could be fixed with a simple law.

[Archon-X]

GP doesn't know what he's talking about.

Firstly:
Both VISA and MC do not allow 'Cross Sales' between different merchants - that is, passing your CC to another merchant.

Now, these rules exist, but are not enforced, typically unless a merchant is abusing them [IE, selling the data, passing it on without disclosure, etc]
About 3 months ago MC came down hard, and started enforcing its rule, due to a large amount of abuse (probably relating to this incident)

Visa is also currently in talks of shutting down / rolling up abusive merchants - they met in Europe about it about 8 days ago.

Secondly:
To hold, store, re-use or transfer CC information, in theory you have to be PCI compliant, which is a fairly stringent process that ensures everything is encrypted, etc, CVV data isn't held [or if it is, you need a higher level of compliance] - security of the networks, machines, sites, etc are all tested.

Now that doesn't stop your gas station owner (or anyone that doesn't care about CC rules) from taking a copy of the info - but outside of that, this is very strictly controlled.

Re:Could be fixed with a simple law.

[The Master Magician]

So, you're saying that Amazon One-Click scam should be abolished because it's obviously causing consumers to buy without thinking about the consequences?

Re:Could be fixed with a simple law.

[mcgrew]

How about a law saying they can't divulge ANY information? Why should they be allowed to in the first place?

Re:Could be fixed with a simple law.

[Thaelon]

That's incredibly shortsighted given that merchants already forward the information to processing companies, simply to validate and see if the charge will go through.

How about we simply disallow deceptive advertising? That would fix this and a host of other bullshit besides.

Re:Could be fixed with a simple law.

[tibman]

There is no such law?
So what is there to stop a gas station owner in backwater Kentucky to publish my CC number online? ...scary...

He would need internet access and a computer first.

Joking! Full disclosure: I'm living in KY

Re:Could be fixed with a simple law.

[thisnamestoolong]

What are you talking about? The post is about how vendors should not be able to supply your CC info to a DIFFERENT vendor. The whole point is that if you are going to be buying from SOMEWHERE else that you would not expect to be buying from, you will be prompted for CC info again, making you aware of the fact that you are buying something. Amazon's One-Click 'scam' is all within the same site. I personally choose not to use it, as I have a distinct lack of self control and having to re-enter my payment info slows me down and forces me to think about the purchase, but for those with better self control, it is a great idea.

Re:Could be fixed with a simple law.

[The Master Magician]

I'm replying to the guy who said that he would prefer to re-enter his credit card information for every transaction he makes on the Internet.

The obvious benefit to marketers and retailers of you not having to re-enter your credit card information is that you think less about making the purchase. As you pointed out, people with less self control will tend to purchase using One-Click without thinking about the purchase as much.

The Affinion,Webloyalty,Vertrue offers all take advantage of this tendency to make it easy for you to purchase. The assumption here is that there is some sort of scam, when in reality all the information is there on the page, but they just make it easy to sign up by transferring most of the information from the partner. The "scam" is them taking advantage of this lack of self control. So, now we are in effect creating legislation to regulate personal responsibility.

Re:Could be fixed with a simple law.

[amicusNYCL]

How about we simply disallow deceptive advertising? That would fix this and a host of other bullshit besides.

That's brilliant! In addition to outlawing it, of course we also need to be able to enforce those rules. So that means that we should set up a federal body, or maybe a commission, that could regulate false and deceptive practices in commerce and trade. Sort of like a Federal Trade Commission, if you will.

Perhaps we could implore President Wilson to consider this in his crusade against the trusts!

Re:Could be fixed with a simple law.

[sukotto]

You assume that the legislature is willing and capable of passing simple laws. I think the evidence is against you there.

Re:Could be fixed with a simple law.

[thisnamestoolong]

The problem here is that the information is being transferred to a totally unrelated vendor. It is stated in the fine print that this will be the case, but this is not something that most people would be looking out for. I would fully support legislation making the transfer of payment information between vendors illegal -- there is no reason for this other than to rip off the customer.

Re:Could be fixed with a simple law.

[The Master Magician]

The other assumption you're making here is that there is nothing to be gained from these services that people sign up for, when in reality there is plenty to gain. A friend of mine signs up for these things regularly and takes advantage of the free month and then cancels before getting charged. If there was nothing that these things offered then they would have been shut down completely a long time ago. Scams come and go. You see those sorts of businesses pop up, make a few million off the backs of unsuspecting consumers and then disappear. Affinion,Webloyaly,Vertrue, these guys have been in business doing this same thing for ten years now.

Re:Could be fixed with a simple law.

[bughunter]

Exactly. And when Congress tries to pass laws forbidding this stuff, they invest millions of dollars in brib^H^H^H^Hcampaign contributions to "protect their freedom to innovate." I'm sick of financial institutions using the word "innovate" as a euphemism for "figuring out new ways to rip people off while obeying the letter of the law."

Re:Could be fixed with a simple law.

[blueskies]

Actually they are scams because they don't make it clear that they are going to charge you money.

There are millions of sites online where you can get a coupon or discount for giving up your email address. These scams look identically to those offers accept these scams actually charge your CC even though you NEVER gave them your CC number.

What if the reply Submit button on slashdot quietly charged your CC every time you replied to a comment? It's exactly the same thing. It's a scam designed to trick people into signing up for a fee services. That's why congress is looking at it because of the sheer number of people that were "tricked" into signing up for it.

Re:Could be fixed with a simple law.

[The Master Magician]

I think you already saw one of the images of the offers in question above. How much more clear do they have to make it than the text above the button that says, "You authorize us to transfer your credit card information" or the text on the button saying, "Yes, sign me up." Or the image on the side saying, "Free for 30 days $12 a month thereafter."

Comparing that to having the Slashdot submit button charge your CC number is ludicrous.

Re:Could be fixed with a simple law.

[blueskies]

Just because that one site presents all of that information, doesn't mean all of the sites do.

Either way, trying to trick people into signing up for a services, should not be categorized as a legitimate business activity.

Comparing that to having the Slashdot submit button charge your CC number is ludicrous.

What? you failed to notice they updated their ToS which they say they can do at anytime?

Re:Could be fixed with a simple law.

[John Whitley]

A law that explicitly disallows merchants to give credit card information to another party would fix this problem.

Here's a way to hack that. First issue: merchants like to process these credit card transactions, too. That means providing this info to another party, the payment processor. I don't mean to Visa, Mastercard, etc. I mean to the companies that comprise the various tiers of third-party payment processor services. This includes some banks, Paypal, and a whole industry of service providers that nearly everyone (even big retailers like Amazon) have to go through in order to process payment transactions (and not just for credit cards). So it turns out that third-parties MUST get this info. So you say, only "payment processors" (insert handwavy legal definition here) can receive such info.

Fine, then what happens when one of these scammer companies becomes (or is bought by, etc.) a payment processor? Back to square one, eh? Think like someone trying to hack/game the system.

If it's possible to craft appropriate legislation that limits the transfer of payment information, that might (or might not) be a good idea. But I'd argue that it's not so much the improper passing of information that's the issue here, it's the (fraudulent, or nearly so) piggybacking of an unauthorized transaction (or worse, subscription) onto an authorized transaction. In the current system, passing of credentials is equivalent to "authorizing" which confuses these two issues. On this basis, it might be more fruitful to apply and/or strengthen fraud laws as these scams are all dependent on confounding the customer to get money instead of transacting legitimate, well-informed business.

Re:Could be fixed with a simple law.

[ukyoCE]

While you and parent+GP+GGP make sense, there would still be loopholes where the original company would process the charges on behalf of the "rewards" company.

On the plus side, this is more effort and bad press for the legitimate company, compared to passing you to an advertising page and letting someone else do the dirty work.

Re:Could be fixed with a simple law.

[txwikinger-slashdot]

No. There is no problem that amazon is making the credit card transaction as a service and never conveyes the information to a third party. Even, otherwise, it should be clearly stated who has your private information. A essential part of data protection is to know who has information. How would it be posssible otherwise to make private data information requests to be able to demand deletion or correction of private information.

Parent doesn't make any sense

[Eudial]

It would alter "it's" adds?!

It should use the preview button.

Re:Credit cards..

[ShadowRangerRIT]

So you don't do online shopping of any kind? Brilliant. Enjoy paying 20% more for everything.

Of course, you could get a card which you pay off in full every month, and make sure not to sign up for suspicious looking reward programs, but that would require self-control and common sense. If you check your statements occasionally, you can note and contest suspicious charges; the time spent checking is less than the time spent fiddling with cash over the course of a month.

Customer Loyalty?

[AlpineR]

A couple years ago I went to a local movie theater and the box office line was too long so I chose to buy tickets from the computer kiosk. After choosing the showtime and sliding my credit card, a screen popped up saying:

Customer Loyalty?
YES | NO

Uh, no? I thought it was asking me if I was enrolled in some discount program I had never heard about. I answered honestly (or figured that if I lied then it'd ask for an ID number I didn't have). But I could see how Web sites might ask a similar question and fool customers into buying something when they had a reasonable expectation of getting something free.

Re:Customer Loyalty?

[guruevi]

Actually, these companies didn't even ask the vendors for it. In the beginning of this whole debacle the shop you buy from used a piece of software that handled the credit card transactions (as they should) similar to the PayPal gateway.

However, the unscrupulous owners of that gateway forwarded the credit card details to shops like WebLoyalty which would start charging you $10/month while they got a kickback. That's when they charged me $10. After enough people complained about it to VISA and the like (I found out after the first charge and cancelled all purchases from said vendor), they changed it to include a 'confirmation screen' which was a simple: would you like to get a 10% coupon next time you shop (Yes/No). Later they added the small letters (first you had to scroll down to it since it was conveniently located outside the visible area) which said they could charge you $10 or more per month.

I was included in a class action suit against WebLoyalty and they settled but after lawyers fees nothing was left (literally, I think it was a $10M settlement, lawyers fees were $9.5M and the rest was donated to charity).

Happened to me

[dbet]

I got a mysterious charge on my credit card. I looked up the company, and the only info I could find was hundreds of people complaining about that same company, and also some theories about how they were able to get people's credit card numbers (sites they're affiliated with, etc.). They were also "uncontactable". My bank had no trouble removing the charge, but to be safe I canceled my card and had a new one issued.

Re:Happened to me

[gad_zuki!]

That "smart" scammers have moved to the more unregulated world of cell phone charges. I got a text message from "Gamer data" about some cheat codes out of the blue one day and a 9.95 monthly service charge. AT&T was borderline unhelpful in removing it until I started yelling, I wonder what percentage of that 9.95 they pocket?

The FTC needs to crack down on Gamer Data and the rest and we need regulations that require some kind of authorization for these charges, like an AT&T rep or robot voice calling to verify.

Re:Credit cards..

[AliasMarlowe]

Of course, you could get a card which you pay off in full every month, and make sure not to sign up for suspicious looking reward programs, but that would require self-control and common sense.

Where I live, that's considered normal behavior. I don't think anyone I know carries credit card debt from one month to another - it's always paid on time and in full. Maybe I just don't know any morons...
The credit card company is already earning a percentage from the merchant. They should not need to make usurious escalating loans to consumers to get an adequate income. So why enrich them further by impoverishing yourself?

Re:Credit cards..

[IBBoard]

[voice-of-90%-of-Britons]Because it is 'free' money and I can buy stuff I wouldn't otherwise be able to afford[/voice-of-90%-of-Britons]

I agree, it seems completely stupid. The only reason I have a credit card is for the extra protection when buying online versus a debit card, and so that any expenses I incur on company business get paid to me before I pay them to the credit card company! If you can't afford it then you can't afford it, so why make yourself pay more than is necessary for non-essential items as you rack up interest charges?

Re:Credit cards..

[MobyDisk]

To order online, you need a credit card number - but not really a credit card in the common sense. There are prepaid cards, virtual account numbers, credit card numbers that draw from checking, savings, IRAs, CDs, etc. The credit card number has become the ubiquitous standard for transferring money.

I use a virtual card.

[SharpFang]

I use a virtual card. It requires me to generate a CVV2 code every time I make a new batch of purchases - the code is valid only for several hours after generating it.This makes storing it or passing to others useless. Also, I "charge" the subaccount bound to the card with the amount I want to pay, so they can't withdraw more than I consent to.

As for repeating purchases like monthly fees, either I watch for it myself, or use other methods, like bank transfer order. As a general rule, I don't allow anyone ever to withdraw money from my account without my explicit consent for every separate event of doing so.

As for daily, non-online purchases, I use a regular "flat" card, which requires the actual card for the payment, not the card number alone.

Re:I use a virtual card.

[verbatim_verbose]

Seriously, how can anyone on slashdot _not_ do this?

It's such a simple way to prevent these problems. My credit card companies let me set dollar limits and time limits on these virtual cards. You get to worry much less about fraud, as well as companies billing you when you no longer want them to.

Use a prepaid card

[javakcl]

Use a prepaid card for as close to the charge amount as possible. That way once the money runs out, you don't have to worry about the company continuing to charge you (as most do unless you explicitly cancel). And, it doesn't matter if they forward the card info on. When the money's gone, it's gone.

Re:Use a prepaid card

[turtleshadow]

Prepaid credit cards have limitations and you have to shop smart.
1) Most require some sort of activation fee that could be quite high.

2) Many are rejected when re-occuring, "overdraft," or secured payments are "possible."
I've been rejected when traveling and trying to use such a thing for pay as you go cell phone. The company defended saying "but what if you want more minutes?" My response was you cut me off anyhow with 0 credits by your policy and a stalemate occured.
Pre-Paids likely to be rejected when used for renting vacation vehicles like boats, scooters or bicycles. Somehow the system knows these card's aren't fully secured - the reality is you want X hours fun, the company wants X $'s of collateral.

3) Many online merchants do not process these cards correctly. I tried to buy a media CD package from a tech company, and found out that they at the time would charge me but wouldn't ship it to me because its not a full on credit card and wasn't able to be processed by their shipping dept. It was something about mismatch of verification of address. Trying to get a rollback of the charge was impossible by the bank or the company.

5) Any remaining small balance is near impossible to use or get back. Merchants weasel out saying because they are like gift cards they don't have to accept them for a purchase below a minimum. So if it has 3.75 left on the card the merchant can reject it for cause of a minimum $5 purchase (often restaurants). FInding a place and the right item that you can do cash+prepaid card is the only way to zero out the card.

6) There is typically a use it or lose it clause or monthly service that erodes your pre-paid's value if you don't use the balance. This is the lie that it costs many dollars a month for the company to track your prepaid card balance for you (I disagree).

7) Beware the clauses on lost/stolen pre-paid cards. They are often considered same as gift cards or cash and thus have no recourse than be a total loss unless you can prove by police report armed robbery or loss uncontrollable by you such as being car jacked.

Scam needs ALL parties brought to justice

[DJRumpy]

They talked about this one this morning on the Today show. They said that the vendors for the website you are visiting are actually giving your credit card numbers to these 3rd parties, so when you sign up, you don't actually give them your credit card number. They instead get it from the parent site, who happily hands it over for a cut of the profits.

I have to wonder why the parent website isn't being hauled into court for giving away your credit card number? The 'authorization' given is extremely vague. You basically agree to sign up for classmates.com or whatnot, and the parent web site sends classmates your credit card info because you 'agreed' to it on the parent site. Classmates then starts charging your card for a 'membership' fee.

How has this gone on so long?

Re:Credit cards..

[Alinabi]

Have you ever tried to contest a fraudulent charge? I have. It's been 18 months since my first letter to Chase and we are still fighting over it.

Affinion == Scammers

[guyfawkes-11-5]

I know a few people who work for Affinion. They are a very shady company; this isn't the first time they have been investigated. The last go around involved scamming people by sending them $5.00 checks in the mail. If you cashed the check, it would enroll you in a program that would bill you monthly. Looks like they are up to their old tricks, just updated for the internet!

Re:Affinion == Scammers

[T Murphy]

If law requires costs of any business transaction to be stated before benefits, and in same or larger text of similar visibility, I should think people could only be scammed out of stupidity and not because they simply didn't see there was a charge involved (a lesser form of stupidity, depending on the case).

As much as I'm tempted to say people should know better, I hate to see a scammer profit more than I hate to see people be stupid.

Where exactly do we stop at this?

[The Master Magician]

How much protection does the average consumer need from marketing at this point? You're sliding down a slippery slope when you say that reading the fine print (which in the case of these offers isn't exactly that fine, there are various call outs all over these pages indicating that you are signing up for a service, that you get a month free and then pay money thereafter) is just too onerous for the average consumer and that the government must intervene to protect them. When offering something up like this is the company expected to just put up a big banner at the top saying, "HEY, WE ARE CHARGING YOU FOR SOMETHING IF YOU CLICK YES!" before even trying to sell the person on the product?

People like to say that they didn't know what they were getting into when they clicked through on these things. Well, how did you not know when it is spelled out in great detail on the page?

Re:Where exactly do we stop at this?

[The Master Magician]

There's a difference between being honest and being stupid about how you market a product.

Outside the viewable area?

http://www.xconomy.com/wordpress/wp-content/images/2009/08/webloyalty_offer_changes.jpg

You have to scroll down the page to get to where you enter your information, passing by every piece of information that informs you about what you are getting into. I've never been fooled for one minute by one of these offers, because it is all there in black and white.

I'm of the opinion that the less government intervention in e-commerce the better.

I also find it ironic that the guy leading the charge on this is one of the richest Senators out there and his money comes as a result of one of the biggest monopolies in history that used some of the shadiest business practices ever created.

Re:Where exactly do we stop at this?

[bzipitidoo]

What exactly are you calling "marketing"? What I'm reading about here has another name: fraud. And that print you say isn't fine? Yes, it is. It's pretty easy to see that the intent is to confuse and trick people into saying yes to something rather different than what they thought they were agreeing to. The agreements could have been much simpler and shorter, but were purposely drawn out in order to generate more opportunity for the seller to slip things in. And arguably the intent of the entire program of a typical credit card affiliate is a pretext to stick on a monthly charge, no other reason. They never intended to provide a service of real value to their victims. A strong clue of that is they aren't eating their own dog food. A good example of such a "service" are those fraud protection services that supposedly detect and protect from misuse of your credit card, something that banks are required by law to do anyway, and that wouldn't be such a problem if banks had set up the entire system more securely.

As for the laissez-faire, let the buyer beware tone of your comment, legitimate merchants have every interest in stopping this fraud. In order to operate, the market must meet public expectations of honesty. Business would not last long if consumers could not trust that they would not be robbed whenever they went shopping, and decided the only safe thing to do was not shop at all. Markets must be policed. If Enron and Worldcom have faded from memory, didn't last year's financial meltdown drive that point home recently enough for you? Madoff should never have gotten away with his fraud for as long as he did, and one of the reasons he did was the lack of policing. No doubt we'll have to relearn those lessons in future decades.

Re:Where exactly do we stop at this?

[tlhIngan]

How much protection does the average consumer need from marketing at this point? You're sliding down a slippery slope when you say that reading the fine print (which in the case of these offers isn't exactly that fine, there are various call outs all over these pages indicating that you are signing up for a service, that you get a month free and then pay money thereafter) is just too onerous for the average consumer and that the government must intervene to protect them. When offering something up like this is the company expected to just put up a big banner at the top saying, "HEY, WE ARE CHARGING YOU FOR SOMETHING IF YOU CLICK YES!" before even trying to sell the person on the product?

People like to say that they didn't know what they were getting into when they clicked through on these things. Well, how did you not know when it is spelled out in great detail on the page?

It's not that, actually. It's the scammy places where you buy your product, then they pop up another page that says "Thank you for shopping at Merchant.com". But scroll down, in fine print, it says "We also signed you up for a $10/month voicemail service. If you don't want this service, you must phone within 24 hours." or other crap like you must click a tiny link "No, I don't want this service" instead of the big shiny "Continue" button presented higher up. Of course, the merchant and the service split the $10/month that you've now signed up for, and the "continue" button serves as "confirmation" that you agreed to the service.

The even scammier sites sign you up for stuff like "messaging products" that charge your phone bill $10/month, knowing it's practically impossible to get your phone company to remove the charge, or prevent future charges, other than changing your phone number. This often plays out in those free sweepstakes offers that people often sign up for - win a free product! or other crap.

http://arstechnica.com/tech-policy/news/2008/05/cram-this.ars

I suppose the merchants use it as a way for you to get 10% off coupons and such for the next time you shop, too.

Re:Where exactly do we stop at this?

[The Master Magician]

I like how we've gone from online marketing to Enron and Worldcom and global financial collapse. Talk about completely off topic. Spare me the claptrap about policing markets. Government is only interested in policing those businesses that don't supply them with enough lobbyist cash.

http://www.xconomy.com/wordpress/wp-content/images/2009/08/webloyalty_offer_changes.jpg

Take a look. Marketing, it's what drives e-commerce. Everything is spelled out on the page. What's the trickery here? When you sign up for any recurring service they try to sell you on something before telling you about what you have to pay for it, but in the end they do tell you. Hell, there is a big burst there on the side that states 30 Days Free then $12 thereafter.

Legitimate merchants are the ones working with Affinion, Webloyalty and Vertrue. Look at the list of companies that are on their rolls. Buy.com, Fandango, Orbitz, Classmates, pretty much every flower sales company out there.

These programs have been so successful that some of those "legitimate" companies have implemented their own rewards programs and cut out the middleman.

Re:Where exactly do we stop at this?

[DavidTC]

Indeed.

I get sick of the people who think it's the right of businesses who operate however they want.

Corporations exist because the government lets them exist. They're supposed to have some sort of purpose that actual benefits society.

Accepting X dollars of money from people, and giving out X/100 dollars back to people who actually comply with their 'rewards' and submit everything, is not, in any way, shape, or form, benefiting society. They are providing absolutely no goods or service whatsoever.

Individual people can provide whatever sort of scammy service they want, subject only to the various laws about fraud. Corporations exist only because we let them, and we should stop letting them even if they're 'within the law'(1) if they aren't providing any gains for society.

1) Of course, this behavior really shouldn't be within the law in the first place.

Re:Where exactly do we stop at this?

[The Master Magician]

Corporations should only exist for the betterment of society? Come on. You are living in some fantasy land if you think that is how things will ever work.

Re:Where exactly do we stop at this?

[The Master Magician]

I have never seen a service offered by any of the three companies in question that auto-signed you up where you had to call them within 24 hours. If you click the continue button and enter your email address (or other verification information) on the page rather than clicking no thanks then you are agreeing to all the little details they put up there.

I have heard of such things through Facebook where you sign up to get points in a game such as Farmville or Mafia Wars and you do it by putting in your cell phone number and they sign you up for something that way.

Again though, read the fine print before entering any of your information on a page. If you are getting something out of going to the page (even "FREE" points), then inevitably you are entering into a transaction. The only reason people ask you to enter personal information such as email or anything else is either to verify that you have read something or to collect that information to use in email communications/marketing or a transaction.

Re:Where exactly do we stop at this?

[Kral_Blbec]

It's amazing how stupid some people are on the internet. It is almost as if all literary skills go out the window and the don't freaking READ WHAT THE SCREEN SAYS!

A while ago an extended relative asked what I wanted for Christmas (we do a rotation where everyone gets a couple random names and they buy for those names only rather than something for every single person, that way everyone gets some stuff but you dont have to spend a lot on people you don't even know/care about). Anyway, rather than listing a bunch of stuff, I told them just to look me up on Amazon where I have a couple public wishlists running. Tell them to just search for me on the Amazon wishlists, no problem right? Ive tested it and my name brings it straight to me. I was dead wrong, they just tried to use the product search and didn't find me (my biography isnt listed yet I guess, go figure) even though I told them explicitly to go to with WISHLIST page which is linked right at the top of the screen. I cried a little for humanity.

Worst part is, I'm related to these people.

Re:Where exactly do we stop at this?

[Mister Whirly]

No benefit at all? I bet the shareholders in all those corporations probably have a slightly different view than you do. And legally speaking, a corporation is an individual.

Re:Where exactly do we stop at this?

[spitzak]

When offering something up like this is the company expected to just put up a big banner at the top saying, "HEY, WE ARE CHARGING YOU FOR SOMETHING IF YOU CLICK YES!" before even trying to sell the person on the product?

YES! That is an excellent description of exactly what should be required.

Re:Where exactly do we stop at this?

[DavidTC]

And legally speaking, a corporation is an individual.

No, it's not.

The courts are idiotically pretending that they have some rights, but that doesn't make them an individual, and they certainly has never been found to have the right to exist at all.

Re:Where exactly do we stop at this?

[Mister Whirly]

Please show me where any individual has "a right to exist at all". And the courts aren't "pretending that they have some rights", the courts have established that some rights as individuals also apply to corporations. Hence my statement.

Re:Where exactly do we stop at this?

[The Master Magician]

Give me a break.

Which commercial on television blasts you with "THIS COSTS $XX!!!!" before even showing you the product?

Re:Where exactly do we stop at this?

[DavidTC]

Please show me where any individual has "a right to exist at all".

You do not have to grant actual real objects the right to exist. They either exist, or they do not exist. If you can touch it, it needs no 'right' to exist, that makes no sense at all. Humans are not created via government documents. Humans cannot cease existing by filing paperwork.

Humans 'live'. Humans have a right to life.

The right to life, in addition to be in the Declaration of Independence (Which some people wrongly argue is not valid US law.), is also in the Universal Declaration of Human Rights, which the US did sign, making it US law.

Legally, people in the US have the right to live. (The government, of course, can remove this right via due process of the courts, just like it can remove the right to liberty and imprison people, or remove their right to vote.)

And the courts aren't "pretending that they have some rights", the courts have established that some rights as individuals also apply to corporations.

As corporations have no right to exist, they cannot possibly have any other rights whatsoever, regardless of what nonsense the court has invented. I have no problem with saying 'People running a corporation have the right to free speech using that corporation', but phrasing it like the corporation has the right itself is just stupid.

The fact we've forgotten that corporations have no right to exist, that we've forgotten that corporations are merely paperwork that the government approves or does not, that we've forgotten that before a corporation is allowed to exist we're supposed to check the stated purpose of it and see if granting the incorporation of it would be in the best interests of society, is a lot of what's wrong with this nation.

Re:Where exactly do we stop at this?

[Mister Whirly]

Well, that is a nice world you have painted but unfortunately we both live in this real one where corporations DO exists, and have the legal right to. I am not crazy about it either, but I am not delusional enough to pretend that isn't that way it really is. If you don't like it, work to change it, don't pretend it didn't happen.

american business sense. 'hands off business'

[unity100]

why ? becauuuuuseee, you will cost americans jobs !!!

this is what happens instead.

Re:american business sense. 'hands off business'

[amicusNYCL]

That's right, this is the American system of laissez-faire commerce at work.

As you know, laissez-faire is an American term that means "a whale's vagina". At least, that's what Ron Burgundy told me.

Re:AHA!

[spun]

Wait, what? You mean, we can spend some of the money we didn't spend on the bailout to reduce the debt instead of keeping it around for an emergency? That's crazy talk.

Happened to me too

[GodfatherofSoul]

I was being charged a monthly subscription to a porn site that I had no clue about. At least, that's what I told my girlfriend when she saw the bill.

Re:Credit cards..

[IICV]

Because in America, credit cards are just about the only way to build up a good credit score. Without a good credit score, you end up paying much more for big purchases (if you have to take out a mortgage for them, which is usually the case).

I would be totally fine just using my debit card all the time - except that does nothing for my credit score, which means I have to use a credit card if I ever want to do anything outrageous like buy a house.

Re:Credit cards..

[jp10558]

Yes. So far only on my Debit Card with HSBC, but I would figure it would work the same with a Credit Card. In my case, I've called up the 800 number, navigated to dispute a charge or operator help or whatever it was. I talked to them, got a call back the next day from security. Talked to that rep for about 5 minutes explaining exactly what happened. The money was credited back to my checking account then. In about a week I got a letter in the mail saying HSBC had closed the dispute and the money was mine.

Easy as pie, though I've only done it twice in 10 years, so if you're trying to scam anyone I expect it wouldn't work for long. I did recently look online for my Citibank credit card, and they had a full web based form right in where you view your account activity. However, in this case, the merchant issued a refund once I called them.

In Other News ...

[The_Quinn]

This just in: the government launches an investigation into certain online charges and fees!

In other news, the government takes half your money.

Re:In Other News ...

[blueskies]

And the gov't doesn't even give you $5.00 off shipping coupons -- the NERVE!!!!

Re:Credit cards..

[thePowerOfGrayskull]

Have you ever tried to contest a fraudulent charge? I have. It's been 18 months since my first letter to Chase and we are still fighting over it.

If it's been that long, look into Regulation Z guidelines and start raising a stink about it. There are pretty stringent rules around how and when these issues must be resolved, enforced at the federal level as well as by the associations (MC, Visa).

It can take a while, depending on the circumstances - assuming you don't mean fraud in the sense of "my card was stolen and all these charges were added", but rather "this charge showed up and I did not approve it.". The usual flow is: you submit the dispute. they contact the merchant. The merchant must provide proof that you approved the purchase. if they can't, it is charged back to them. If they can, and the proof is valid, then generally it's considered closed. However you can re-open it with additional evidence to support your statement; and also request anything submitted by the merchant IIRC.

Re:Credit cards..

[Kral_Blbec]

Thats not entirely true. If you dont have a credit score (I dont, never owned a credit card in my life) then some of the big boys wont work with you, but there are plenty that will and give the same (or lower) rate as you would with the big boys. They just spend time looking at you and your income rather than a 3 digit number that doesnt really say anything.

Re:Credit cards..

[blueskies]

Fitness club membership / loan is another way. The whole fitness membership scam/deal looks like loan payments. My membership actually really helped out my credit score because i had it for so long.

It happened to me once..

[tirk]

I had this happen once from a movie ticket purchase on Fandango. Bought some movie tickets, then a week later got an $80 charge from some place I had never heard of. I made a very loud argument to Fandango about enabling my credit card number to be fraudulently used, etc, etc. Within 2 two days I had all my money returned and some extra for the trouble, several free movie tickets, and a promise from Fandango that they would change the way companies advertise when they are sharing financial information, and indeed they did. People just need to just stay on top of their accounts, understand their rights and loudly speak up your intention of fully enforcing your rights and usually that's all it takes.

Re:Credit cards..

[Alinabi]

Thanks buddy, but that how it works in theory. In practice, it is a little more complicated. This transaction I am contesting is a one time purchase of $108 at a brick-and-mortar store in Illinois (I don't live in Illinois). Chase's position from the beginning has been "can you prove you were not in Illinois that day?" which, unfortunately for me, I cannot. So, what exactly would you do? Spend $5000 on a lawyer to resolve a $108 dispute?

Re:Credit cards..

[nurb432]

Or get a dedicated use card where you just put in the amount you just spent. And once that authorized purchase goes thru, that card goes inactive.

Re:I need to RTFA

[pwfffff]

I find 3-4 grammatical errors on CNN's website per WEEK. The sad part is that they're all on the front page (I never even click the stories... just like to laugh at the headlines and what's 'big news'). I honestly don't think they even have an editor any more.

Can't someone just take them out back and shoot them already? It pains me to watch them limp around...

Drop the extra

[WeeBit]

I believe this is why the The Senate Committee on Commerce, Science and Transportation has the investigation in the first place. Even if they filled out a form twice, some are bound to think the info is for the same offer. Many times I have re-entered information and confirmed a order. And because they are asking for the last 4 digit SSN it makes the offer look even more like the same offer. This would look like a confirmation to some people. Don't let the online loyalty programs fool you... they know exactly what they are doing, look at how long they have gotten away with it.

Re:Credit cards..

[RajivSLK]

No, the merchant has to provide proof.. In the form of a signed receipt in the case of a brick and mortar "card present" transaction. That's it... the signature on the receipt is your agreement to pay. If they can't produce that or another agreement to pay then the charge should be reversed... chase is screwing you around... asked them unequivocally for a copy of the signed receipt or agreement to pay. If they refuse find out who regulates credit card companies and threaten to file a complaint with them and with your local representative etc.

Re:Credit cards..

[thePowerOfGrayskull]

No, the merchant is the one who has to provide proof - if it's a brick and mortar that makes it much easier, as they can produce a signed document.

Hm - if it's as straightforward as you say, then I may know someone who can help. Is there a way I can contact you directly?