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The Future of Shopping: Trapping You in a Club You Didn't Know You Joined (bloomberg.com)

Posted by msmash on from the word-of-caution dept.

Just a word of caution: the next time you spot a great deal on a shopping portal, you will want to carefully look for all the radio buttons, and tick boxes -- and perhaps also skim through the ToS -- before placing the order. Bloomberg has an in-depth piece on the ordeal of a customer who purchased a lingerie item from an e-commerce website called Adore Me. Little did the customer know that the $19.95 she was spending to purchase a piece of cloth would end up costing her -- partly because of her own ignorance -- more than $300. Adore Me, you see, maintains a subscription model in which it charges users a fee of around $40 a month, even if they don't purchase anything. It might surprise many, but Adore Me isn't the only shopping portal or service that runs this sort of tactic. "It's the new thing," says Francisca Allen, the deputy district attorney of California's Santa Clara County. "There's thousands and thousands of companies that do this." What's more, these companies have made it frustratingly difficult to cancel these subscriptions -- it often requires you to sit through a one-hour call to the customer representative and listening to a bunch of funky songs that you suddenly don't adore as much. Bloomberg reports:Hundreds of customer complaints against Adore Me and other subscription e-commerce businesses are stacking up at the Federal Trade Commission, according to records obtained by Bloomberg. They follow a pattern: Shoppers believe they've been tricked into signing up for recurring credit card charges, often for a relatively small amount that can be easily overlooked in a monthly bill. Then companies make it an exasperating hassle to quit and get a refund.

18 of 165 comments (clear)

  1. Other scams... by Anonymous Coward · · Score: 4, Informative

    Dealdash dot com... charges you $0.60 per automatic bid even if you don't win the auction. The TV ads are highly deceiving. They even have an elaborate troll system to make their reviews look good. Hellcatx... they are running a massive TV ad campaign for a car giveaway that supposedly helps charity. The prises are probably worth 1/100th of the income, and no mention of how much actually goes to charity.

    1. Re:Other scams... by JustBoo · · Score: 5, Informative

      Here is THE ANSWER. Use Paypal.

      First, you won't be giving your credit card info to gawd knows who. It can be literally anyone from a group of criminals in Russia to psycho teens in Brazil to douche companies described in the article. If a 'company' does not have the wherewithal and ability to get setup to take Paypal, do you really want to give them your credit card anyway? If they don't take Paypal, I consider the company incompetent or scam artists.

      If you still somehow get on some recurring plan through Paypal, that is registered with Paypal as an actively recurring charge, you can go to Paypal and simply change the status of that account to inactive. Done. Paypal will no longer payout to them.

      I've done this myself with so-called companies that refuse to stop billing me. I check the list at least once a month. it has saved my tones of time and money. Note, I am not affiliated with Paypal in any way and rarely recommend any business. But with online shopping, Paypal has truly worked for me.

    2. Re:Other scams... by HiThere · · Score: 4, Informative

      Odd comment. Based on prior stories I have included PayPal as one of the scam companies.

      A better answer, though one that's bothersome, is to have a special limited credit card, and use that for web purchases. Many drugstores sell them, and probably many other places do too. But doing it that way is a bother. I've opted for a less secure way...I use two separate banks. One to store money, and one the handle transactions. The credit cards are linked to the one that only hold a small amount of cash at a time, and where I periodically refill the accounts. So you can choose your degree of security by deciding how much cash to hold in your transaction accounts.

      --

      I think we've pushed this "anyone can grow up to be president" thing too far.
  2. cue libertarian fucktards... by Anonymous Coward · · Score: 3, Insightful

    ...telling us that it's "your own fault for not reading the smallprint", even though

    1) Capitalism is philosophically based upon perfectly informed rational consumers, which these guys aren't, by definition;

    2) It's made deliberately hard, but not impossible, to cancel, by the company purely being a bunch of shitlords without necessarily technically breaking any law (not everything can be reduced to clear rules);

    3) Society gains no benefit from protecting a ridiculous contract, so it would be irrational to do so.

    1. Re:cue libertarian fucktards... by Archtech · · Score: 5, Interesting

      Capitalism is philosophically based upon perfectly informed rational consumers, which these guys aren't, by definition

      There is, in fact, no such thing as a perfectly informed rational customer, there never has been and there never will be. Those two "simplifying" assumptions are typical of the fundamental defects that render economics almost worthless in its present form. Of course economists like simplifying assumptions, because otherwise their field would be far too complicated to make any sense out of. Unfortunately the assumptions mean that the resulting rules and laws apply only in an abstract world which hardly bears any resemblance to the real world we live in.

      1. "Perfectly informed". Even in the simplest possible model of a market, a village produce market where fruit and vegetables are being sold from a collection of stalls, perfect information is far from guaranteed. Who knows what Fred has been spraying on his pumpkins? And have those delicious-looking peaches been previously frozen, transported, and defrosted? Usually the vendors will know, and maybe a few others - but then it is in the interest of the vendors to keep the information secret, even at the cost of a bribe or quid pro quo favour. Thus the concealment of important product information actually becomes part of the market, with its own price. Consider now a more sophisticated, "evolved" market such as the electronic stock exchanges where corporations will pay huge sums of money to have their servers a few feet closer to the exchange's own servers. That may give them a few nanoseconds' head start, which may be enough to make the difference between winning billions and losing billions. Again, we see payments (this time, very large ones) being made precisely to prevent information being perfectly shared. And the pattern is repeated everywhere.

      2. "Rational customers". This one departs even further from reality and common sense. If you think about it for five minutes, you will see that the very concept of a "rational customer" is wholly artificial and almost meaningless in relation to the real world. We are all rational, more or less by definition, as a function of being human. But what does that really mean? I think you'll agree that virtually all humans use reason (facts and logic) as a tool when they need to, never as a way of deciding what it is they want. To suggest that all customers can be "rational" is, in effect, to make the ridiculous assumption that they are wholly focused all of the time on making financial gains! It would be more realistic to say that a rational person is one who devotes as little time, effort and attention to economic necessaities as possible, the better to enjoy the good things of life - which are NOT money (as such) or buying and selling. It is true, to some extent, that those who do best at the economic "game" are those who focus on it most unremittingly - spending almost all their waking time in business activities and reckoning their success in life solely by their net worth. For such people, the Bible has a warning.

      "And he spake a parable unto them, saying, The ground of a certain rich man brought forth plentifully: And he thought within himself, saying, What shall I do, because I have no room where to bestow my fruits? And he said, This will I do: I will pull down my barns, and build greater; and there will I bestow all my fruits and my goods. And I will say to my soul, Soul, thou hast much goods laid up for many years; take thine ease, eat, drink, and be merry. But God said unto him, Thou fool, this night thy soul shall be required of thee: then whose shall those things be, which thou hast provided? So is he that layeth up treasure for himself, and is not rich toward God". (Luke 12:16-21) http://biblehub.com/kjv/luke/1...

      --
      I am sure that there are many other solipsists out there.
    2. Re:cue libertarian fucktards... by l0n3s0m3phr34k · · Score: 3, Insightful

      If people actually fit their ideal of "rational customers", then ideas like "buyer's remorse", "Post-purchase rationalization", "Winner's curse", etc. The fact that these terms exist show that no consumer (or human, assuming all humans are consumers) are ever 100% "rational" when it comes to the "market" and purchasing. If we were, the "impulse buy" area next to the check-outs wouldn't exist.

      Taking this a step further, it also shows that the idea of the perfect "free market" is a false idea as well, since it requires a 100% rational customer 100% of the time. It also infers no marketing or product trickery, which is also obviously never going to happen. The only way THAT could happen was if somehow a new "market" that somehow intrinsically required complete transparency appeared...and all sellers involved had to "start over" so no current brands or corps could participate. Honestly, the original Silk Road was probably one of the closest manifestations of this we've seen in recent history.

    3. Re:cue libertarian fucktards... by complete+loony · · Score: 4, Informative

      One of the cleverest features of the rational expectations revolution was the appropriation of the term "rational." Thereby, the opponents of this approach were forced into the defensive position of either being irrational or of modeling others as irrational, neither of which are comfortable positions for most economists. (Barro 1984)
      I suggest that critics instead adopt the attacking position of describing this concept (the capacity to foretell the whole future of the economy) as a dictionary would, as "Prophetic Expectations".

      The Dodgy Dynamics of Economics

      The rest of that paper focuses on demolishing the whole concept.

      --
      09F91102 no, 455FE104 nope, F190A1E8 uh-uh, 7A5F8A09 that's not it, C87294CE no. Ah! 452F6E403CDF10714E41DFAA257D313F.
    4. Re:cue libertarian fucktards... by jcr · · Score: 3, Insightful

      Oh, fuck off. Libertarians don't support deceptive business practices.

      -jcr

      --
      The only title of honor that a tyrant can grant is "Enemy of the State."
    5. Re:cue libertarian fucktards... by HiThere · · Score: 3, Insightful

      No. libertarians don't support deceptive business practices. Libertarians do support deceptive business practices in that they are opposed to all means possible for impeding them. (And while libertarians [lower case "l"] don't support deceptive business practices, they are incoherent about how they should be stopped.)

      To say that you are opposed to something while at the same time being explicitly against all possible means of opposing it gives the lie to your original claim...or shows that you are incoherent.

      --

      I think we've pushed this "anyone can grow up to be president" thing too far.
    6. Re: cue libertarian fucktards... by mspohr · · Score: 4, Insightful

      Corporations are accountable to their managers and stockholders and have only one goal... maximize profit (at my expense).
      Governments are at least in theory accountable to voters and do not have a profit motive. (However, we all know that governments can be corrupted by corporations buying favors.)
      So, if I have to choose between a greedy corporation whose only goal is taking my money or a government accountable to voters (which may or may not have been corrupted), I'll choose the government.

      --
      I don't read your sig. Why are you reading mine?
    7. Re:cue libertarian fucktards... by sjames · · Score: 3, Insightful

      Nor do they support any practical way to put a stop to them.

    8. Re: cue libertarian fucktards... by dryeo · · Score: 4, Informative

      You have to weigh that against the fact that a greedy corporation can ultimately do nothing to you, while the government has the power to fine you or send you to jail, and they can send a group of heavily armed men to break down your door to force you to comply with their decisions.

      Just yesterday I saw the private railway police, so yes there are still corporate forces that have the power to arrest you.
      It wasn't that long ago that corporations had much more power, see eg the Pinkerton Detective Agency who at one point was larger then the military of the USA and routinely beat and killed people the corporations were unfriendly with.
      There's a reason that we've transferred most all law enforcement to the government, mainly that they're more (or at least were) responsible then big business to the people. Businesses ultimate goal is to make sure you have no choice but to deal with them and at times have been very successful at this.

      --
      https://en.wikipedia.org/wiki/Inverted_totalitarianism
  3. Re:Ten CDs for a buck by cellocgw · · Score: 3, Informative

    Sounds like it to me. And at least back in those days, you could return anything you didn't want for free. But the LP/CD clubs didn't charge a monthly fee for belonging, which I think is the new twist here.

    Personally, I'd send a return-receipt registered letter telling them you ain't a member any more, and use that when it gets to lawsuit or debt-collection time.

    --
    https://app.box.com/WitthoftResume Code: https://github.com/cellocgw
  4. Always Use Disposable Credit Card #s by Anonymous Coward · · Score: 5, Insightful

    It is shit like this that makes me glad I use disposable credit card numbers for every single online purchase. In 15 years, I've never had a case of fraud or any other problem. But they have saved my butt a bunch of times. My bank emails me for every rejected authorization so I've seen every time some lowlife 'merchant' tried to charge me without my consent. Most recently Angie's List was trying nearly every day for about two months to "renew" a subscription.

    If you have a Bank of America or Citibank credit card account then you already have access to disposable numbers. There are other smaller banks (especially outside of the US) who support disposable numbers too.

  5. Reverse the charge by smooth+wombat · · Score: 4, Informative

    The moment you see the charge hit your bill you contact your credit card company and have them do a chargeback. Tell them you've been trying to cancel with this company who refuses to honor your request and these are fraudulent charges.

    The credit card company will remove the charge from your bill then attempt to collect from the other company.

    Rinse and repeat each month.

    http://www.geeksonfinance.com/...

    --
    We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
    1. Re:Reverse the charge by chepati · · Score: 5, Interesting

      DON'T DO THIS ON A REGULAR BASIS!!! This will negatively affect your credit score and will cost you much more than some paltry couple hundred bucks in comparison in the long run.

      I never thought I'd say this, but there is safety in shopping at big chains (Wallmart, Amazon, etc) -- they get much heavier scrutiny and can't get away with sleazy business practices for long. They are regulated, they have to report their finances, etc. On the other hand, small operations run from a garage in a third-world place, don't have to abide by the same laws so the only buffer between you and them is your credit card company. The CC company *will* protect you, but if you fall into the category of a habitual scam victim, you'll be flagged as a high-risk customer and your credit score will take a beating.

      Speaking of sleazy companies, I was almost scammed by a VPN company advertised here on ./ -- they had a "lifetime" membership that looked too good to be true. I did my due diligence and contacted the company to get assurance that "lifetime" meant forever. At that point I went in and got the promotional 3 day trial and both the service and customer support were pretty good, so I ended up contacting them again and getting the lifetime package. First they sent me a paypal invoice for a recurring payment type of service. That should have been the red flag, but like most people, even those who believe can spot a scam a mile away, I got greedy and ignored my gut feeling that things that are too good to be true, are never truly good. After getting reassured that the recurring payments invoice was a clerical error, I proceeded to pay via paypal. At this point I saw that the paypal payment was actually a recurring payment service. Long story short, I kept contacting their Tech Support department every day for a week and getting the run arounds, until I decided that enough was enough and opened a charge dispute with paypal. A day later I got a vindictive letter from the VPN company telling me that now that I had opened a dispute with Paypal, they will await Paypal's decision and if the case was decided in their favor, they would neither issue a refund, nor provide service to me. It was so childish that I could not stop laughing. However, minutes later I got another email that the VPN company had decided to refund the full amount on an exceptional basis.

      So the moral of the story -- stay away from questionable internet outfits. And keep one thing in mind -- no matter how smart you believe yourself to be and how discerning and cautious, there are people out there who spend the time and effort to hone their con artistry skills so well that you won't realized you were had until you've parted ways with your money. If it's too good a deal, it's a scam.

      Also, try to put a a few buffers between you and questionable merchants. In my case, I deliberately chose to pay via PayPal, because I knew they have a good dispute process and because my instinct told me I may have to come to rely on it. I was right. My absolutely last resort would have been my credit card issuing bank.

  6. Not difficult to cancel by ebonum · · Score: 3, Informative

    One call to the credit card company and all will be fixed.
    I think most people will be pleased to find how easy it is to get their credit card company to reject all new charges from a online vendor plus credit you back for whatever was taken.
    Plus, when Mastercard or Visa see a lot of problems with a vendor, MC and Visa will cut them off. Or make it more expensive/difficult for the bad company to operate.

  7. CC Dispute by flyingfsck · · Score: 3, Informative

    The easiest way to reverse it is to call your credit card company and dispute the charges.

    --
    Excuse me, but please get off my Pennisetum Clandestinum, eh!