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Senate looking to crack down on deceptive marketing

Tyler Metzger

Always remember someone’s name. Trust me — it could save you at least $19.95.

It happened like this: I put an ad on Craigslist looking for a synthesizer. I got a few phone calls from peeps saying they had one, and one person left a message saying he had the exact one I wanted for a baller price. So I returned the call. No answer. I called again. No answer.

Being the savvy consumer I am, I figured I’d try a different route to track down this deal. But I couldn’t remember the guy’s name. I Googled the number, and it brought me to PeopleLookup.com. The Web site said it would give me the name, state and address of the person. I figured with this info I could find this dude and seal the deal on the synthesizer.

Senate looking to crack down on deceptive marketing

Creepy? YES.

I signed up for the service; it was 95 cents. Thinking what a great deal I got, I flew through the transaction, and got the name and address I wanted. I then tried to contact the person, only to find the address was in Indiana. It was a fake person; someone just chose a random number in hopes of selling something else — a basic Craigslist scam.

Weeks went by and that was that. I forgot all about PeopleLookup.com. Until one day I looked at my bank account and noticed a $19.95 charge from Intelius had been deducted from my account.

Hold up. Why was I charged from Intelius? If anything, I thought some random charge was going to be from PeopleLookup.com.

Oh, I forgot to read the fine print:

“Click the ‘Continue’ button to accept this special offer price and activate your trial membership to take advantage of the great benefits that Identity Protect has to offer. The membership fee of $19.95 per month will be charged/debited by Intelius.com to the credit/debit card you use today with Intelius.com after the 7-day trial.”

It was my fault for not canceling the subscription before the 7-day trail offer ended, but who said PeopleLookup.com could give my credit card info to Intelius?

Well, I did when I signed up for the special offer of 95 cents. The “deal” immediately enrolled me in an identity theft protection plan, which costs $19.95 a month. I could have paid $4.95 to get the fake guy’s name and address and skip being signed up for the monthly charge, but that would have been too easy.

Straight up, what PeopleLookup.com does is wrong. Even if the deal was somewhat transparent, I don’t want my credit card details being passed around like some sort of Thanksgiving turkey. And you know what? The Senate feels the same way.

Next week, the U.S. Senate Committee on Commerce, Science, and Transportation will hold a committee hearing on a report titled “Aggressive Sales Tactics on the Internet and their Impact on American Consumers.” During the meeting, they will … do exactly what that ridiculously long title says –investigate the marketing practices of companies that shadily sign up customers for unwanted services.

Here’s another example of such a service: If you go to the movie ticket vender Fandango.com, somewhere between buying the ticket and fully completing the transaction you’ll be moved to a “special offer” page. The offer, which TechCrunch has a screenshot of, is $10 off your next purchase from Fandango.

Sounds like a good deal. However, if you’re able to read the fine print, once you click on the offer, your credit or debit card details are transferred to a different company, and you’re enrolled in a program that costs you $12 a month.

There are basically three Connecticut-based marketing companies that are behind all this — Affinion, Vertrue or Webloyalty. They are now the target of a Senate investigation against companies that “use highly aggressive sales tactics to charge millions of American consumers for services the consumers do not want and do not understand they have purchased.”

The Senate is also investigating companies that have agreements with Affinion, Vertrue or Webloyalty. And there are a lot: A Senate report claims that “more than 450 e-commerce Web sites and retailers have partnered” with the marketing companies. Here are some of them:

  • 1-800-FLOWERS.com
  • Buy.com
  • Classmates Online
  • Continental Airlines
  • Fandango
  • Half.com
  • Hotwire
  • Intelius
  • MovieTickets.com
  • Orbitz
  • Pizza Hut
  • Priceline.com
  • Shutterfly
  • Tiger Direct
  • US Airways
  • Vistaprint USA

So why would a trusted e-commerce site partner up with those grease balls? Money, of course. Affinion, Vertrue, and Webloyalty’s e-commerce partners have earned more than $792 million.

Moreover, 88 companies have earned more than $1 million and 19 have made more than $10 million. And get this: Classmates Online has made more than $70 million by confusing customers into signing up for ambiguous monthly memberships.

The Chairman of the Senate Commerce Committee, Sen. Jay Rockefeller, said the primary focus of the investigation is consumer protection.

“American consumers shouldn’t have to worry that their favorite Web sites are ripping them off during the checkout process,” Rockefeller said at the hearing. “It’s not ethical, it’s not right, and it’s not the way business should be done.”

He added, “I worry about this because the holiday shopping season is just beginning.”

After the Senate report was released, Affinion, Vertrue and Webloyalty said in statements that they have installed supplementary safeguards. They include being more clear about charges and a new feature that requires customers to enter the last four digits of their credit card number before the membership is charged.

That doesn’t get me my $19.95 back. But a sucker is a sucker, and the bottom line is that if you are buying some flowers, movie tickets or even a synthesizer, we all need to keep our eyes open for anything fishy.

See related: Credit report hustle moves to Craigslist, Master Ginger Peter: I need your debit card, Credit card ‘phishing’: What it means, how to prevent it

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