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Kevin Hunt - The Bottom Line
The Bottom Line
June 30, 2012
Music fans can get a lot more than Carrie Underwood concert tickets at the Ticketmaster website. How about an offer for a rebate and surprising monthly $16.99 charges on their credit card bills?
It's happening at Ticketmaster, where a company owned by one of the country's biggest direct marketers, Affinion Group of Stamford, uses the rebate offer to enroll visitors in a "savings club" called Great Fun that offers discounts on entertainment, dining, travel and shopping.
The rebate offer is an actual link on the site, not a pop-up ad. Ticketmaster website visitors then click through to the Great Fun site, where they must call a telephone number to get the rebate. The rebate conditions: pay $1 for a 30-day trial to the club, cash the rebate check, then cancel the trial membership within 30 days.
Last summer, Julie of Southington called.
"I sat through a very annoying pitch and kept trying to turn the offer down and just get the rebate," she says, "but the woman was persistent and assured me that I'd only be charged $1 for a 30-day trial period of Great Fun. . . . She read all the disclaimers a million times and I stupidly agreed, gave her my credit card info and signed up for the free trial."
Julie canceled within the 30-day period and figured she'd made $19.
Ten months later, in mid-June, Julie noticed a $16.99 charge from an unfamiliar source, "TLG*Shopper" on her credit card statement. She immediately called her credit-card company to contest the charge. Though Julie spotted that charge, she had missed eight other $16.99 monthly payments, or $152 total. Luckily, the credit-card company reimbursed her and blocked future charges from TLG. TLG, in fact, is Trilegiant of Stamford, a subsidiary of Affinion Group.
What happened to Julie is a twist on direct-marketing tactics that became so pervasive in recent years, -- and that cost consumers millions -- that it took a 2010 act of Congress to stop it. The Restore Online Shoppers Confidence Act in 2010 made these "post-transaction" third-party sales illegal. The legislation specifically targeted action perfected by three Connecticut companies — Affinion, Webloyalty and Vertrue — that displayed ads as consumers completed online purchases.
Those direct-marketing ads did not require consumers to re-enter credit card information to enroll in, or pay for, club memberships. Remarkably, the three Connecticut businesses already had that information — the companies whose websites the consumer just visited quickly sold it to them. Click on the ad and, without realizing it, you pay. Some big-name online retailers, including Buy.com, GMAC.com, Priceline,FTD.com, Priceline and Ticketmaster were among the sites that sold consumers' credit card information..
Now, the businesses apparently have adapted.
"It's not as though they click on a link and suddenly they're signed up," says Jacqueline Peterson, a Ticketmaster spokeswoman. "They have to re-enter their [credit-card] information. And they can ask Great Fun to stop the service."
It's called an end-around. By enticing consumers with the rebate offer and requiring telephone confirmation, the companies fulfill the legal requirement of getting credit-card information directly from the consumer. If the fine print were available from Julie's call, it would have shown she also agreed to join second club, Shoppers Advantage, which also required cancellation.
"For both programs," says Trilegiant spokesman Michael Bush, "she gave credit-card information and consent to join. It seems when she canceled Great Fun, she forgot the second half of her conversation with our phone rep, the part where she signed up for Shoppers Advantage."
Julie scoured her email and did find correspondence from the marketers, but at the time apparently dismissed it as junk mail. It's an easy trap that has caught the attention of state authorities.
"The attorney general's office is aware of and looking into these practices," says Jaclyn M. Falkowski, a spokeswoman for the state attorney general's office.
Affinion owns several other marketers, including Webloyalty of Norwalk, which it acquired last year. (Vertrue filed for bankruptcy in April.) It operates dozens of programs like Great Fun, according to the Better Business Bureau with names like Buyers Advantage, Discount Travel Club, Discount Shopping Club and Cheap Tickets Gold. It still counts some of the biggest names in online business, like Ticketmaster, as partners.
Until the Restore Online Shoppers Confidence Act, Affinion faced multiple investigations by state attorneys general offices:
>> The Connecticut attorney general's office and two other states sued Affinion/Trilegiant in 2005 for using deception to enroll consumers in clubs.
>> Also in 2005, the company settled with the Florida attorney general's office after allegations of deceptive and unfair trade practices.
>> In 2006, it paid $8 million to 17 states after an investigation into deceptive selling practices.
>> And in 2010, not long before ROSCA, it paid $8 million after a consumer fraud investigation by the New York attorney general's office.
So what to do now?
If you join a club or accept an subscription of any kind and charges from unfamiliar companies show up on your credit-card bill, call your credit-card company immediately and contest the charge. (Never use a debit card for an online transaction.)
Then call the company that charged your card and make sure your membership has been canceled. To be sure, send a cancellation request in writing.
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