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