I normally don’t make post about online scams or questionable internet marketing tactics but this one is happening on such a large scale that I felt the need to pass it on. Last week the US Senate Committee on Commerce, Science and Transportation release a really disturbing investigation about some of the aggressive sales tactics that a surprisingly large number of Fortune 500 companies are practicing.
Here’s what Sen Jay Rockefeller had to say:
“After six months, this Committee has found that the companies we are investigating have figured out very clever ways to manipulate consumers’ buying habits so they can make a quick buck. American consumers have been complaining for years about these misleading practices and asking for answers – and rightly so,” said Chairman Rockefeller. “Millions of Americans are getting hit with these mystery charges every month – we have to do all we can to protect the hard working families relying on us to look out for their wallets and well-being.”
What you need to know about the report.
- Three Internet companies—Affinion, Vertrue, and Webloyalty—exploit consumers’ expectations about online shopping to trick them into joining their membership clubs.
- Consumers often do not know these companies have their credit card numbers until they start seeing charges on their bank statements.
- Affinion, Vertrue, and Webloyalty and their e-commerce partners have earned over $1.4 billion in revenue with their misleading tactics.
- There have been more than 30 million consumer enrollments in these clubs and several million people are unknowingly enrolled in these clubs at any one time.
- More than 450 e-commerce websites and retailers have partnered with Affinion, Vertrue, and Webloyalty to employ aggressive sales tactics against their online customers splitting the revenue about 50-50.
- Eighty-eight companies have made more than $1 million by partnering with Affinion, Vertrue, and Webloyalty, including Classmates.com, which made more than $70 million.
- Almost no one receives the “cash back award” that Affinion, Vertrue, and Webloyalty offer to online consumers at the time of enrollment.
What do you think about this? Leave your comment below and pass it on.