Senate Panel Widens Probe On Mystery Credit Card Charges
By Fawn Johnson, Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- The Senate Commerce Committee is widening the scope
of an investigation into electronic marketing practices that can generate
unexpected monthly charges on consumers' credit cards.
Committee Chairman John Rockefeller, D-W.V., on Friday sent Affinion Group
Inc., Norwalk, Conn., a letter seeking a host of documentation about its
marketing practices.
Rockefeller wants to know how online consumers at popular Web sites like
Priceline.com Inc. (PCLN) or Staples.com (SPLS), find themselves charged for
unwanted club memberships offered by Affinion or its subsidiaries.
Affinion spokesman James Hart said the company is reviewing the committee's
request and fully expects to cooperate.
In May, Rockefeller demanded similar data from two leading marketing
companies, Vertrue Inc. and Webloyalty.com, that acquire consumers' billing
information through agreements with online retailers like Fandango and Orbitz
Worldwide Inc. (OWW).
"This investigation has progressed from the preliminary stage to a full-blown
congressional inquiry into the post-transaction marketing industry," said
committee spokeswoman Jena Longo. "It's becoming clearer and clearer that
consumers can be at risk for these mystery charges when they shop online."
The committee has received thousands of pages of documents from Vertrue and
Webloyalty. Longo said Affinion is "another large player in this industry."
Affinion's Hart said his company "has adopted the highest marketing standards
in our industry, we believe any examination will recognize that the products,
services and benefits we offer to customers provide clear terms and exceptional
value."
In all the letters, Rockefeller said thousands of consumers have complained
that they didn't authorize monthly charges to their credit cards.
Customers on e-commerce Web sites sometimes incur charges after a pop-up
window appears offering cash back rewards if they sign up for an online
membership service.
When customers provide their email addresses and click a "yes" button, their
credit card information is automatically sent to a marketing company. That
company can then charge the customer a monthly fee - often $9 to $12 a month -
unless the customer cancels the online membership service.
Last year, the Better Business Bureau said it had received nearly 1,800
complaints about Affinion. People said they were being charged, sometimes for
years, for memberships in groups like "Shoppers Advantage" or "Privacy Guard"
after they clicked on pop-up boxes advertising rebates or discounts.
Both Vertrue and Webloyalty say they exceed the law's expectations in telling
customers about membership terms.
Webloyalty customers must confirm twice online before they enroll, and they
receive at least one follow-up email message before their credit cards are
charged.
-By Fawn Johnson, Dow Jones Newswires; 202-862-9263; fawn.johnson@dowjones.com
(END) Dow Jones Newswires
07-10-091211ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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