Another Consumer Burden — The Darker Side of Web Loyalty Programs
The latest, pervasive consumer burdens spreading widely on the Internet are the so-called Web Loyalty campaigns that have been, until recently, a significant income earner for a shockingly long list of major online shopping sites including 1800Flowers, Buy.com, Classmates, Continental Airlines, Expedia, Fandango, Hertz, Orbitz, Priceline, Redcats USA, Shutterfly, Travelocity, U.S. Airways, VistaPrint and many other ultrahigh volume, online retailers.
Since July 2009, federal investigators in the U.S. have been probing three companies in particular: Affinion, Vertrue and Webloyalty. If you've shopped online, you've likely seen Webloyalty, Affinion, and Vertrue's efforts in the form of a secondary transaction page which pops up asking if you're interested in 'cash-back', coupon or discount offers against future purchases. All you have to do is enter your email address and that's the end of it, or so it appears. The problem is that what you've actually signed up for (merely by entering your email address — no other information) is a regular monthly charge by Affinion, Vertrue and Webloyalty of anywhere from $4-$20 on the credit card you supplied to the original retailer or site from which you made a purchase prior to seeing that pop-up offer. In other words, Affinion, Vertrue and Webloyalty, many online retailers, and the bank which issued your credit or debit card, are all in cahoots.
Check your credit card statements right now for those small recurring charges. All such charges and the associated so-called loyalty programs have fallen under the uncomfortable scrutiny of the U.S. Senate Committee on Commerce, Science and Transportation.
Back in August, Affinion, Vertrue and Webloyalty denied any wrongdoing and argued that their services offer users savings and are valued by many subscribers. In my opinion, the three companies have only offered what sound to me (and, I think, to most members of the Senate committee) like rather vapid responses.
Subsequently, Webloyalty announced late in August that it would henceforth require in all its ads and pop-ups that customers enter the last four digits of the credit or debit card used in the previous/current transaction to confirm their agreement to pay the membership fees. Affinion similarly altered its requirements in November. New, more extensive and clearly worded language is being added to the pop-ups which specifically explain that you're about to sign up for a recurring charge. Visit Webloyalty and Affinion Group to find out more about the so-called loyalty industry of which these companies are a part. If you don't like what you read, complain loudly.
Caveat emptor big time. These companies contribute nothing to the world. They create profits without providing a service, without manufacturing anything, and without actually doing much of anything. They convince you to sign up to pay a recurring monthly fee for something they have determined quite accurately that most of us will forget about the moment we navigate off the web page. Will the 'cash-back', coupon or discount really work at some point in the future if you do remember you've got it? Yes — but only if the server is available, the campaign hasn't ended, and the item or service you've chosen next time actually qualifies. Remember though that as usual, and not unlike the rebate dodge in which retailers rely on the fact that almost 65% of rebate coupons are never sent in, the vast majority of people who willingly or inadvertently sign up for web loyalty programs either forget about the deals, lose their access codes, or never have an opportunity to take advantage of any legitimate deals simply because they don't do the required kind of shopping, all the while still paying a small monthly charge for long periods of time. Don't let down your guard either, because Affinion, Vertrue and Webloyalty aren't giving up this money maker without a fight. Their whole loyalty business model is based in my view on not fully presenting consumers with the reality of recurring monthly charges, as opposed to providing consumers with the sort of fully informed consent that actually reads and feels that way.
As of this writing, Continental Airlines, US Airways, Priceline and VistaPrint have cut ties with Affinion, Webloyalty, and Vertrue. I suspect, more bad press and more consumer pressure will convince other online retailers to get either out of the web loyalty business or devise yet another surreptitious approach.
This latest online headache got caught because a few sharp-eyed consumers started questioning recurring charges appearing on credit and debit card statements. Make no mistake though. In my view, Webloyalty, Affinion, Vertrue and the retailers and banks with which they partnered, never believed for a moment that the income stream (in the tens of millions of dollars) would go on forever. They knew the programs would be questioned eventually, and that the government would slap them all on the wrist, waggle its finger and admonish them to not do it again. No punishment and no penalties. In the meantime they've all made their money, so it's on to the next scam.
Some people will note that almost every Affinion, Vertrue and Webloyalty sign-up page contains informative, consumer language in the fine print. If a few people inadvertently sign up, then complain loudly when they see the recurring charges, caveat emptor and too bad for those people. It is when hundreds upon hundreds of consumers began to complain that the effective visibility and comprehension of the consumer language on the sign-up pages was called into question. To Affinion, Vertrue and Webloyalty I say shame on all of you. Find something better to do with your ideas.
Since July 2009, federal investigators in the U.S. have been probing three companies in particular: Affinion, Vertrue and Webloyalty. If you've shopped online, you've likely seen Webloyalty, Affinion, and Vertrue's efforts in the form of a secondary transaction page which pops up asking if you're interested in 'cash-back', coupon or discount offers against future purchases. All you have to do is enter your email address and that's the end of it, or so it appears. The problem is that what you've actually signed up for (merely by entering your email address — no other information) is a regular monthly charge by Affinion, Vertrue and Webloyalty of anywhere from $4-$20 on the credit card you supplied to the original retailer or site from which you made a purchase prior to seeing that pop-up offer. In other words, Affinion, Vertrue and Webloyalty, many online retailers, and the bank which issued your credit or debit card, are all in cahoots.
Check your credit card statements right now for those small recurring charges. All such charges and the associated so-called loyalty programs have fallen under the uncomfortable scrutiny of the U.S. Senate Committee on Commerce, Science and Transportation.
Back in August, Affinion, Vertrue and Webloyalty denied any wrongdoing and argued that their services offer users savings and are valued by many subscribers. In my opinion, the three companies have only offered what sound to me (and, I think, to most members of the Senate committee) like rather vapid responses.
Subsequently, Webloyalty announced late in August that it would henceforth require in all its ads and pop-ups that customers enter the last four digits of the credit or debit card used in the previous/current transaction to confirm their agreement to pay the membership fees. Affinion similarly altered its requirements in November. New, more extensive and clearly worded language is being added to the pop-ups which specifically explain that you're about to sign up for a recurring charge. Visit Webloyalty and Affinion Group to find out more about the so-called loyalty industry of which these companies are a part. If you don't like what you read, complain loudly.
Caveat emptor big time. These companies contribute nothing to the world. They create profits without providing a service, without manufacturing anything, and without actually doing much of anything. They convince you to sign up to pay a recurring monthly fee for something they have determined quite accurately that most of us will forget about the moment we navigate off the web page. Will the 'cash-back', coupon or discount really work at some point in the future if you do remember you've got it? Yes — but only if the server is available, the campaign hasn't ended, and the item or service you've chosen next time actually qualifies. Remember though that as usual, and not unlike the rebate dodge in which retailers rely on the fact that almost 65% of rebate coupons are never sent in, the vast majority of people who willingly or inadvertently sign up for web loyalty programs either forget about the deals, lose their access codes, or never have an opportunity to take advantage of any legitimate deals simply because they don't do the required kind of shopping, all the while still paying a small monthly charge for long periods of time. Don't let down your guard either, because Affinion, Vertrue and Webloyalty aren't giving up this money maker without a fight. Their whole loyalty business model is based in my view on not fully presenting consumers with the reality of recurring monthly charges, as opposed to providing consumers with the sort of fully informed consent that actually reads and feels that way.
As of this writing, Continental Airlines, US Airways, Priceline and VistaPrint have cut ties with Affinion, Webloyalty, and Vertrue. I suspect, more bad press and more consumer pressure will convince other online retailers to get either out of the web loyalty business or devise yet another surreptitious approach.
This latest online headache got caught because a few sharp-eyed consumers started questioning recurring charges appearing on credit and debit card statements. Make no mistake though. In my view, Webloyalty, Affinion, Vertrue and the retailers and banks with which they partnered, never believed for a moment that the income stream (in the tens of millions of dollars) would go on forever. They knew the programs would be questioned eventually, and that the government would slap them all on the wrist, waggle its finger and admonish them to not do it again. No punishment and no penalties. In the meantime they've all made their money, so it's on to the next scam.
Some people will note that almost every Affinion, Vertrue and Webloyalty sign-up page contains informative, consumer language in the fine print. If a few people inadvertently sign up, then complain loudly when they see the recurring charges, caveat emptor and too bad for those people. It is when hundreds upon hundreds of consumers began to complain that the effective visibility and comprehension of the consumer language on the sign-up pages was called into question. To Affinion, Vertrue and Webloyalty I say shame on all of you. Find something better to do with your ideas.
Labels: Affinion, consumer alert, scams, Vertrue, web loyalty, Webloyalty
posted by Howard Carson, Managing Editor @ 10:22 AM
