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GameStop, Other Retailers Subpoenaed Over Credit Card Information Sharing

Posted by Soulskill on from the you-can-trust-us dept.

New York State's Attorney General, Andrew Cuomo, has subpoenaed a number of online retailers, including GameStop, Barnes & Noble, Ticketmaster and Staples, over the way they pass information to marketing firms while processing transactions. MSNBC explains the scenario thus: "You're on the site of a well-known retailer and you make a purchase. As soon as you complete the transaction a pop-up window appears. It offers a discount on your next purchase. Click on the ad and you are automatically redirected to another company's site where you are signed up for a buying club, travel club or credit card protection service. The yearly cost is usually $100 to $145. Here's where things really get smarmy. Even though you did not give that second company any account information, they will bill the credit or debit card number you used to make the original purchase. You didn't have to provide your account number because the 'trusted' retailer gave it to them for a cut of the action." While there is no law preventing this sort of behavior, Cuomo hopes the investigation will pressure these companies to change their ways, or at least inform customers when their information might be shared.

8 of 117 comments (clear)

  1. PCI? by harlows_monkeys · · Score: 5, Interesting

    There may be no law against it, but how does it comply with PCI security requirements? Shouldn't those companies be losing their permission to accept credit cards?

    1. Re:PCI? by ducomputergeek · · Score: 4, Informative

      Depends on who is actually running the charge. If it's B&N, for instance, who runs the transaction and then gives the $$$ to the 3rd party minus B&N's kickback, then there is really nothing there against PCI rules. If B&N is giving the 3rd party client all the card info, then there could be some problems. But even then, the big no-no is how the CVV code is handled. So long as it isn't stored anywhere outside of ram and that it is discarded once the transaction is made, the PCI folks don't give a damn as far as I can tell.

      I'll give an example. We run a system where each one of our merchant has their own processing account. Usually we charge the merchant a flat annual hosting fee, but some of our clients wanted to move to a different model where we added in a $1.00 per order service fee to their customers instead of paying the annual rate. Our clients cited the economy, blah, blah, blah, and it's not something we wanted to do, but it was either that or loose the revenue from that client period. So we basically run card twice, once under our gateway for the $1.00 fee, then again under the merchant's gateway for the total bill.

      --
      "The problem with socialism is eventually you run out of other people's money" - Thatcher.
    2. Re:PCI? by L4t3r4lu5 · · Score: 5, Informative

      They've lost permission to accept my credit card. I'll shop elsewhere from now just for thinking that I'd allow this, regardless of restitution and new legal protections.

      FALITFA ( http://www.ag.ny.gov/media_center/2010/jan/jan27a_10.html ): Barnes & Noble, Orbitz.com, Buy.com, Ticketmaster.com, MovieTickets.com, FTD.com, Shutterfly.com, 1-800Flowers.com, Avon.com, Budget, Staples.com, Priceline.com, GMAC Mortgage, Classmates.com, Travelocity, Vistaprint, Intelius, Hotwire.com, Expedia/Hotels.com, Columbia House, Pizza Hut and Gamestop/EB Games were subpoenaed.

      --
      Finally had enough. Come see us over at https://soylentnews.org/
  2. So if I use some one else's credit card by ImNotAtWork · · Score: 5, Interesting

    with out authorization it is credit card fraud among other things that a DA will throw at me. If a business gives my information to a third party and the third party charges my credit card then that's just sharing? I need to start up a couple of businesses.

    --
    open source sub sim. I might start coding again for this. http://dangerdeep.sourceforge.net/contribute/
  3. Social Games and the Federal Probe by eldavojohn · · Score: 5, Informative

    with out authorization it is credit card fraud among other things that a DA will throw at me. If a business gives my information to a third party and the third party charges my credit card then that's just sharing? I need to start up a couple of businesses.

    Apparently social gaming is a great business model for this kind of crap. The mentioned retailers get you after you make your purchase but when you need more resources in Farmville or Mafia Wars on Facebook:

    In games like Mafia Wars, Farmville, YoVille and Vampires Live, you know, some of the major sources of all those garbage announcements cluttering up your Facebook, players compete to complete missions and level up. By leveling up, you can complete more difficult missions and fight off weaker opponents. You can wait for your various energies to regenerate naturally over time, or you can purchase with real money in-game boosts. Or, you can complete various lead generation offers, many of which are of the "answer page after page of questions and opt in and out of receiving various kinds of spam" variety. Some of them install malware and adware that is impossible to remove. And some of them secretly subscribe you to monthly recurring $9.99 credit card charges.

    Don't ever put your credit card information into Facebook or a Facebook app. Social Media is rife with crap like this. Right about now we should be asking when we'll get to see the findings in the the federal probe that set out to address shoddy "business practices" like this and what is being done about it now that we know about it?!

    --
    My work here is dung.
  4. Re:Legal but dishonest by Archon-X · · Score: 5, Informative

    Both VISA and Mastercard have very explicit regulations on data sharing, and how 'Cross Sales' are conducted: they both prohibit it in their merchant agreements.
    VISA is somewhat lax on its enforcement, preferring to take a case-by-case approach if there is abuse, however has been cracking down significantly on this type of behavior of late: http://corporate.visa.com/media-center/press-releases/press969.jsp

    Mastercard will fine and terminate merchants it finds passing CC information between third parties. Fines normally start at 25k per offense.

    The storage of CC data is another highly regulated procedure. 'Normal' merchants are prevented from storing CC data, and to even handle it, normally have to become PCI-compliant.
    The storage of CVV data is very, very regulated - You have to have PCI-level 3 compliance - something typically reserved for merchant processors themselves.

    To say that no regulation exists is somewhat uninformed.

    However, even with the above all in place, as these guys are all using merchant accounts, they're going to see all the CC/CVV information in the flux; as presented by the article, it's very common to use this data, if the merchants can 'stay under the radar'.

  5. Smarmy? by YourExperiment · · Score: 4, Informative

    Here's where things really get smarmy.

    Excuse me?

    Smarmy: unpleasantly and excessively suave or ingratiating in manner or speech

    Perhaps the word you were looking for is one of: deceptive, devious, underhand, sneaky, execrable, abhorrent, hateful, annoying, irritating, enraging, infuriating or inexcusable?

    It's hard to believe that this practice is legal. I give my credit card details to one company, and it becomes perfectly legal for them to sell these details to a completely unrelated third party, simply because I clicked on an advert on a web site?

  6. Re:So let me see if I have this right.... by tlhIngan · · Score: 5, Informative

    "As soon as you complete the transaction a pop-up window appears. It offers a discount on your next purchase. Click on the ad...." So this is something that affects only people dumb enough to click on pop-ups, while those of us with either blockers or the brains to close pop-ups like this when they open are not affected? Internet darwinism at work and working as intended imo.

    Thanks- I was hoping someone would point this out, and I agree with you. It's sad commentary that today's consumers still don't approach every purchase expecting to get burned. Now, before anyone gets up in arms over that statement, let me explain: I don't agree it *should* be this way, but I know that it *is* this way and protect myself accordingly.

    Actually, it can affect you if you don't click the popup too.

    It's a major scam, and it's not necessarily a popup.

    You click "Continue" on your transaction, and the site summarizes your order. Then instead of a continue button, you have a big button that says "Place order - and get 10% off your next!". What you don't see is hidden in the fine print is a link that says "No thanks - just place my order".

    Or, after you place your order, on the thank you page, it'll have a blurb saying "Special offers for your next order" with "Save 10% off your next order!". Hell, the craftier ones put a 10% off discount on your order automatically, and a link hidden at the bottom saying "No, I don't want the discount".

    The nastiest ones though are the ones that require no clicking at all - you done your order, you close the browser while inadvertently NOT clicking the "No" link. By closing the window and not declining, you're signed up anyway. Hell, I bet half of them exist in the terms and conditions of sale, and people blindly check the box saying they agree.

    Basically, unless you read every word of every screen, it's impossible to not inadvertently do it. It's a huge scam and everyone's hiding behind the fine print. And the fact that people love getting discounts, so a 10% off the next order would be valuable.