Chairman Rockefeller Releases New Investigative Report on Aggressive Sales Tactics on the Internet and Their Impact on American Consumers
November 17, 2009
WASHINGTON, D.C. –John D. (Jay) Rockefeller IV, Chairman of the U.S. Senate Committee on Commerce, Science, and Transportation, announces the release of a new investigative report today, “Aggressive Sales Tactics on the Internet and Their Impact on American Consumers.”
STATEMENT FROM CHAIRMAN ROCKEFELLER:
“After six months, this Committee has found that the companies we are investigating have figured out very clever ways to manipulate consumers’ buying habits so they can make a quick buck. American consumers have been complaining for years about these misleading practices and asking for answers – and rightly so,” said Chairman Rockefeller. “Millions of Americans are getting hit with these mystery charges every month – we have to do all we can to protect the hard working families relying on us to look out for their wallets and well-being.”
KEY FINDINGS FROM THE INVESTIGATION:
• Three Internet companies—Affinion, Vertrue, and Webloyalty—exploit consumers’ expectations about online shopping to trick them into joining their membership clubs.
• Consumers often do not know these companies have their credit card numbers until they start seeing charges on their bank statements.
• Affinion, Vertrue, and Webloyalty and their e-commerce partners have earned over $1.4 billion in revenue with their misleading tactics.
• There have been more than 30 million consumer enrollments in these clubs and several million people are unknowingly enrolled in these clubs at any one time.
• More than 450 e-commerce websites and retailers have partnered with Affinion, Vertrue, and Webloyalty to employ aggressive sales tactics against their online customers splitting the revenue about 50-50.
• Eighty-eight companies have made more than $1 million by partnering with Affinion, Vertrue, and Webloyalty, including Classmates.com, which made more than $70 million.
• Almost no one receives the “cash back award” that Affinion, Vertrue, and Webloyalty offer to online consumers at the time of enrollment.
HEARING TODAY: “Aggressive Sales Tactics on the Internet and Their Impact on American Consumers”
Full Committee - Oversight & Investigations
Date: TODAY - Tuesday, November 17, 2009
Hearing Start Time: 2:30 p.m.
Press Pre-Set Time: 1:45 p.m.
Location: Room 253, Russell Senate Office Building
Mr. Ray France, St. Cloud, FL
Ms. Linda Lindquist, Sussex, WI
Professor Florencia Marotta-Wurgler, New York University School of Law
Professor Prentiss Cox, University of Minnesota Law School
Professor Robert Meyer, Wharton School, University of Pennsylvania
*Not necessarily in the order of appearance