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Post-Purchase Scams Coming Under Fire From Senate

by Terrence O'Brien on November 19, 2009 at 08:35 AM


We're sure that you've all experienced the annoying post-purchase push to get you to subscribe to, sign up for, or buy something after hitting the check-out button at your (not so) friendly online retailer. Well, those often shady offers for rebates and big discounts are now the subject of a Senate Commerce Committee investigation.

These post-purchase scams often subscribe you to discount or rewards clubs without your knowledge. After confirming a purchase, you're often presented with a series of pop-ups promising $10 off, or cash back. Often, those screens only offer one obvious way to exit, and clicking on it quietly passes your billing information on to another site. And you'll be none-the-wiser until three months down the road, when you see an unidentified charge on your card that turns out to be a "membership fee" paid to a "rewards club." The worst part of such scams is that they're often included in the check-out processes of many major Web retailers -- including Barnes & Noble, 1800flowers, Buy.com, Expedia, and Fandango.

The investigation produced a report titled "Aggressive Sales Tactics on the Internet and Their Impact on American Consumers," unveiled by the Committee Chairman John D. Rockefeller this week. "The companies we are investigating have figured out very clever ways to manipulate consumers' buying habits," Senator Rockefeller said in a statement introducing the report. The report names three companies -- Affinion, Vertrue, and Webloyalty -- that have collectively earned $1.4 billion through these misleading tactics and through their enlisted partner sites, 88 of which have earned more than $1 million apiece. The notoriously shady Classmates.com alone netted more than $70 million in profit. You can see the full list of these sketchy sites above in the "Post Transaction Marketing Wall-of-Shame," assembled by TechCrunch.

Senator Rockefeller said in the hearing, "[This] Committee needs to start thinking about the legislative steps we can take to end these practices." Fortunately, the public shame of the investigation and the threat of government action seems to have pushed some of the companies to preemptively change their practices.

You can find out more by reading the staff report here (Warning: PDF), and by checking out the incredibly thorough analysis at Ars Technica here. [From: U.S. Senate Committee on Commerce, Science, and Transportation, TechCrunch, and Ars Technica, via: Huffington Post]

Tags: government, investigation, post purchase scams, post transaction marketing, PostPurchaseScams, PostTransactionMarketing, privacy, scam, Scams

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