Affinion, one of three Web marketing companies recently facing accusations of deceiving credit card holders, informed the US Senate Commerce Committee that it will stop buying credit card information from e-retailers. The company also vowed that it will only process transactions where consumers themselves input transaction details. They also promised to discontinue their practice of charging unwitting clients who join promotions not knowing that they are consenting to being charged with monthly membership fees.
Web companies Vertrue, Webloyalty, and Affinion have recently been receiving a lot of criticisms and complaints from thousands of customers and consumer watchdogs for deceiving people into signing up into membership programs where they were billed fees each month. Majority of the victims were not fully aware of the schemes as policies and regulations of the programs were cleverly hidden in fine print. The three companies are currently being investigated by the US Senate for wrongful business practices.
The three online companies worked in tandem with Web stores who sold companies credit card information of their clients. This practice has so far been lucrative for the entities involved, with one e-retailer earning $70 million for selling billing information of customers. The three Web marketing companies, on the other hand, refused to own up to any wrongdoing, stating that all their business practices are legitimate and aboveboard.
Ever since the US Senate started its investigation on the said companies, a lot of the parties involved have begun to revise their policies, the latest of which was Affinion's announcement of processing transactions that have only been voluntarily encoded by customers themselves. Lawmakers meanwhile have reassured the public that it will continue with its investigation until all issues and questions have been resolved and all responsible parties penalized.
The modus operandi of the three Web companies is to inundate customers who are making a transaction on an e-retailer site with advertisements and promos. Captions of gift items are highlighted to make it look like the companies are giving away goods for free. Unwitting customers on the other hand, would click on the ad buttons in their belief that this would qualify them for promotional items. However, hidden in fine print of these advertisements are agreements that say that once a customer clicks on the confirmation button, they are giving consent to join a membership program that will charge them fees each month. Customers would only notice this when they receive their billing statements and see membership fees for clubs they were not fully aware that they signed up to.