After a year-long investigation into consumer complaints about surprise charges on credit card bills, the Senate Commerce Committee submitted legislation to Congress to outlaw online discount club schemes. The senate bill, called the Online Shoppers' Confidence Act, targets companies that team up with legitimate websites to trick consumers into buying discount club memberships they don't want.

The Act prohibits online vendors from transferring consumers' billing information, like credit card numbers, to discount clubs or other companies. Discount clubs must obtain billing information directly from the consumer.

Also, discount buying clubs must provide clear notice about the terms of their. membership offers. They must obtain the consumer's express consent to purchase a membership by requiring them to take positive action, such as click on an acceptance button.

Original Article

If you've bought something online, anything from flowers to movie tickets, then you've probably seen the ads or promotions offering you a great deal - like money off your next purchase or a "free gift card." These too-good-to-be-true deals usually pop up as your checking out and paying for your purchase.

If you're not careful, one of these great offers may cost you a lot of money. The scam has led at least one state to take action. New York Attorney General Andrew Cuomo has launched an investigation of Webloyalty, Affinion, and Vertrue and several of the retailers or "partners" they do business with. 

The Scam

The scam is devilishly simple. After shopping online and finding exactly what you're looking for, you start the check-out process. This includes filling out your name, address, and, of course, your credit card number. As you complete the deal, it happens.

From out of nowhere, an offer "pops up" on your screen. In exchange for filling out a short rebate form or survey, you'll get a coupon or "store credit" for $10 off your next purchase from the retailer you just used. Or maybe it's a gift card. In any event, it's a tempting deal, and it's free, right?

No, not exactly. At least not most of the time. You see, online "discount clubs" or companies, such as WebloyaltyAffinion, and Vertrue, make deals with all kinds or online retailers. The retailers let the club "advertise" during the checkout process. If you take advantage of the club's "deal," the club gets access to your credit card and other personal information. The club then charges your credit card anywhere from $9 to $15 each month for "exclusive" deals and coupons offered by the club to its members.

For many consumers duped by the deal, they have no idea they're being charged by the discount club until (and unless) they carefully look at their credit card statements. By that time they may have been charged hundreds of dollars, or more.

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Tagged as: Consumer Law, Consumer Fraud, web loyalty programs, consumer fraud lawyer