Chairman Rockefeller Continues Fight to Protect American Consumers and Combat Aggressive Sales Tactics on the Internet

Requests Information from Major Credit Card Companies on Cardholder Inquiries Connected to these Aggressive Sales Tactics

December 3, 2009

Feature Image: 2 Oversight&InvestigationsWASHINGTON, D.C.— Today, John D. (Jay) Rockefeller IV, Chairman of the U.S. Senate Committee on Commerce, Science, and Transportation, sent a letter to three credit card companies—Visa, Inc., American Express, Inc., and MasterCard, Inc.—asking them what they know about the aggressive online sales tactics many online companies use to charge consumers’ credit cards for unwanted club memberships. 

Millions of online consumers have been enrolled in these membership clubs and their credit card or debit cards have been charged even though they never provided the companies with their sixteen digit credit card or debit card numbers.

Chairman Rockefeller sent these letters after a Commerce Committee staff report and hearing showed that a key component of the aggressive online sales tactics is the use of a so-called “data pass” process, which enables websites to transfer consumers’ billing information, including consumers’ credit or debit card numbers, to the companies selling the club membership. “Data pass” has allowed these companies to present misleading enrollment offers to consumers, has led to significant consumer confusion, and has caused millions of American consumers to become enrolled and charged for membership clubs they did not want and were unaware they had signed up for.

“There are more than 4 million American consumers whose credit cards are being charged by mysterious membership clubs after shopping online and most of these 4 million consumers don’t even know it’s happening,” said Chairman Rockefeller. “Through the Committee’s investigation, we learned these online club scams have made more than $1.4 billion dollars through these tactics and charged more than 30 million Americans. This next step in our investigation will help us better understand how millions of American consumers’ credit card accounts can be charged every month for services they don’t want. For many Americans, shopping online is a tool to learn about products, to compare prices, and to find a good bargain – and in these tough economic times when Americans are doing all they can to make ends meet and provide for their families, every dollar counts.”

The letters sent to Visa, American Express, and MasterCard request information related to cardholder inquiries about unauthorized charges stemming from “data pass” and any efforts made by the companies to reduce the number of “chargeback” requests from cardholders. Visa, American Express, and MasterCard have likely processed millions of charges for membership clubs that were not authorized by cardholders. Links to the letters and the Commerce Committee’s November 16, 2009 staff report are provided below.

***Please see letters (all letters use same language) and Commerce Committee investigative report below.***