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

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.

[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.

[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: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.

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: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.