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Senate To Air Findings In Web "Mystery Charge" Probe 120

Posted by kdawson
from the just-your-email-is-all-we-want-where's-the-harm dept.
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. "
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Senate To Air Findings In Web "Mystery Charge" Probe

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  • by aflag (941367)
    I gave some dubious site my credit card and my money mysteriously went missing.
    • Re: (Score:1, Funny)

      by 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 (Score:5, Informative)

      by Old97 (1341297) on Tuesday November 17, 2009 @10:27AM (#30128526)
      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.
      • 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 yo
    • Re: (Score:2, Informative)

      by pyster (670298)
      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.
  • It would alter "it's" adds?!
    • It would alter "it's" adds?!

      It should use the preview button.

    • But what does it all add up to?

    • by elrous0 (869638) *
      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"
      • Re: (Score:3, Funny)

        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.

  • by purpledinoz (573045) on Tuesday November 17, 2009 @09:25AM (#30128026)
    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: (Score:3, Interesting)

      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: (Score:3, Insightful)

        by MobyDisk (75490)

        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.

        • by purpledinoz (573045) on Tuesday November 17, 2009 @10:43AM (#30128716)
          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.
          • 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?

            • 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
              • 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

                • 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.
                  • 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 unsus

                • by blueskies (525815)

                  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 peopl

                  • 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.

                    • by blueskies (525815)

                      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?

            • 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.
          • by ukyoCE (106879)

            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.

        • 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).

      • by vadim_t (324782)

        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: (Score:3, Insightful)

        by SharpFang (651121)

        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.

      • by mcgrew (92797) *

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

    • by SharpFang (651121)

      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...

      • 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.
      • by Archon-X (264195) on Tuesday November 17, 2009 @11:10AM (#30129032)

        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.

      • by tibman (623933)

        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

    • by conlaw (983784)
      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, "N
      • by bughunter (10093)
        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."
    • by Thaelon (250687)

      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: (Score:3, Insightful)

        by amicusNYCL (1538833)

        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!

    • by sukotto (122876)
      You assume that the legislature is willing and capable of passing simple laws. I think the evidence is against you there.
    • 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

  • Customer Loyalty? (Score:3, Interesting)

    by AlpineR (32307) <wagnerr@umich.edu> on Tuesday November 17, 2009 @09:48AM (#30128178) Homepage

    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: (Score:3, Informative)

      by guruevi (827432)

      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 fo

  • Happened to me (Score:5, Informative)

    by dbet (1607261) on Tuesday November 17, 2009 @09:50AM (#30128192)
    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: (Score:3, Informative)

      by gad_zuki! (70830)

      That "smart" scammers have moved to the more unregulated world of cell phone charges. I got a text message from "Gamer data [complaintsboard.com]" 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 callin

  • 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: (Score:2, Informative)

      by turtleshadow (180842)

      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 us

  • 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. Y

  • Affinion == Scammers (Score:3, Informative)

    by guyfawkes-11-5 (1583613) on Tuesday November 17, 2009 @10:50AM (#30128796) Homepage
    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!
    • by T Murphy (1054674)
      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.
  • 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 th

    • 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 prog

      • 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

    • by tlhIngan (30335)

      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

      • 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 p

    • 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
    • by spitzak (4019)

      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.

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

    this is what happens instead.

    • 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.

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

    In other news, the government takes half your money.

  • by tirk (655692)
    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, a
  • 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

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