Shopping Online: Hidden Subscription Scams
Vertrue, "Shopping Essentials" and others
Click here to claim $15.00 Cash Back on this purchase!'
Have you ever looked at your credit card statement to see a
recurring charge that you didn't expect and didn't order? VISA credit card
company reports that
nearly three in ten Americans have been stung by a subscription trap. A
hidden subscription scam occurs when a consumer is purchasing online and is
tricked into buying additon productys or services, which he or she wouldn't, had
they know the details.
CFR classifies post-transaction marketing as a scam because it is business model which built on deception.
Sharing credit card information between companies is, unfortunately,
still perfectly legal. That may change as the
U.S. Senate Committee on Commerce, Science and Transportation
investigates the practice.
How the hidden subscription scam works
You go to a website like Avon, Barnes & Noble,
Budget, Buy.com, Classmates.com, GMAC Mortgage, MovieTickets.com,
Priceline, Shutterfly, Staples, and Ticketmaster.You buy movie tickets, flowers or
electronics, for example. You complete the
transaction, and a page appears offering you cash back or free shipping. When you click the
button a screen appears asking for your email address, which you provide and
complete your transaction.
In return for their cut, these companies
pass consumers' credit card information to the post-transaction marketing
Several months later, you see a charge for $10, $20, $30, or more your credit card statement
from some company you've never heard of.
Who are the post-transaction marketing
companies behind this scam?
Commerce, Science and Transportation Committee, headed by Jay
Rockefeller (D-West Virginia),
began an investigation in 2009 of the industry (the
investigation is still ongoing). According to the committee,
the three biggest players in this business, having earned at least $1.4
billion in revenue over the past 10 years are:
Each is based in Norwalk, Connecticut.
How do you get your money back?
If you paid with a credit card, and it is within 60 days of the
purchase, dispute charge as soon as you see it. Ask your credit card
company to withhold payment while it investigates. Note that you do not
have the same protections if you paid with a debit card.
If the 60-day
dispute window has elapsed, getting a full refund usually requires writing a letter
to the company on statement (send it certified) and waiting months to receive a
chargeback to your credit card.
- Call the company associated with the charge on your credit card
- Be polite, but ask to cancel your membership and demand your money back.
- If the representative refuses to refund your money or claims to be
unable to, ask to talk with a manager.
- Note the date and time of your call and the names of any service
representatives with whom you speak.
- they will probably ask your to send the request in writing, via the mail
(postal service, not email).
What is the government doing to stop these companies?
In January, 2010, Affinion, Vertrue, and Webloyalty
agreed to alter their online offer pages. The companies now require
consumers to enter their 16-digit credit card information a second time to
signup for a membership.
- Vertrue has been sued by the attorneys general of
Iowa. Vertrue was formerly known as MemberWorks.
New York attorney general Andrew Cuomo
issued subpoenas to 22 e-commerce retailers to demand information about
their use of the three post transaction companies:
- Barnes & Noble,
- Budget, Buy.com,
- Columbia House,
- Gamestop/EB Games,
- GMAC Mortgage,
- Pizza Hut,
- Travelocity, and
Who are some of the other companies and websites using post transaction
In addition to those noted in the subpoena above, as of the writing of this
article, March 2010, these companies were also reported to be customers of one
of the three post-transaction marketers:
How to Avoid Getting Scammed in the Future
The ways in which they trick you into signing up are not necessarily obvious,
so take care by:
- Watch out for words like "free," "cash back," and "rebate" on any Web
site, even big, popular websites.
- If the terms and conditions are complicated, confusing, or hard to read;
there's probably a trick in it - better to buy somewhere else!
- Look for pre-checked boxes during the checkout process. Uncheck any that
are clearly what you want!
- Don't use a bank debit card when shopping online. Debit cards do
not provide the same level of protection and right to cancel or appeal that
major credit cards like American Express, MasterCard, and Visa do. The
federal Fair Credit Billing Act only applies to credit cards, not debit
More information and latest news: