Tech: Feds say top e-tailers profit from billion-dollar web 'scam'

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Words like "scam," "fraud," and "arrest" filled the air during a Senate hearing on Tuesday that focused on the controversial marketing companies that allegedly dupe consumers into paying monthly fees to join online loyalty programs, CNET.com reported.

Vertrue, Webloyalty, and Affinion generated more than $1.4 billion by "misleading" web shoppers, said members of the U.S. Senate Committee on Commerce, Science and Transportation, which called the hearing. Lawmakers saved their harshest rebuke for web retailers that accepted big money -- a combined sum of $792 million -- to share their customers' credit-card information with the marketers.

Senate investigators launched their six-month inquiry by examining complaints from people who discovered mysterious charges on their credit card bill. For years, web shoppers have complained that they were signed up to some web loyalty program without their knowledge and were charged fees until they discovered the problem and complained. Some paid fees for years.

To read how the alleged scam works and more details, the entire story is here. The story also includes a link to the Senate hearing on video.

 

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