Legit Web sites team up with shady operators-N.Y.'s Cuomo subpoenas 22 retailers

[RamboLiberal]

Source: MSNBC

It's bad enough the Internet is a money-making machine for con artists and swindlers. Now you have to worry about “legitimate” companies that team up with dishonest marketing firms in order to boost their profits.

New York Attorney General Andrew Cuomo recently issued subpoenas to 22 big name retailers he claims tricked their customers into accepting offers from another companies via pop-up ads that looked like discount offers.

“This online scheme has impacted the finances and tried the patience of tens of millions of consumers nationwide,” Cuomo said in a news release.

The companies under investigation include Barnes & Noble, Orbitz, Expedia, Staples, FTD and Ticketmaster. None of these companies has been charged with anything. Cuomo wants to find out more about their marketing agreements.

Cuomo also subpoenaed records from three marketing companies — Webloyalty, Affinion/Trilegiant and Vertrue. Cuomo claims these three companies take in more than $1 billion a year. Much of that money, he claims “is amassed through fraud” by slamming people with hidden fees. All three companies have been accused of improper conduct in the past, but have always denied any wrongdoing.





Read more: http://www.msnbc.msn.com/id/35221235/ns/business-consumer_news/

[dmr]

1. I'm glad Cuomo's on this

I've gotten these promo pop ups. The one and only time I clicked on it and saw that it was no longer the retailer I just purchased from, I figured it had no true interest in giving me a discount or in valuing me as a customer. I'm always wary and worried about getting scammed. Shame on them all.

How ‘piggybacking’ works

You’re on the site of a well-know retailer and you make a purchase. As soon as you complete the transaction a pop-up window appears. It offers a discount on your next purchase. Click on the ad and you are automatically redirected to another company’s site where you are signed up for a buying club, travel club or credit card protection service. The yearly cost is usually $100 to $145.

Here’s where things really get smarmy. Even though you did not give that second company any account information, they will bill the credit or debit card number you used to make the original purchase. You didn’t have to provide your account number because the “trusted” retailer gave it to them for a cut of the action.

“Judging from the volume of complaints we receive, it’s pretty obvious there is a problem when it comes to disclosure,” says Allison Southwick with the Council of Better Business Bureaus. “And since the customer never had to provide their credit card or bank account information to this third party, they didn’t realize they were going to get charged.”

Horrible way to treat customers

“It is absolutely appalling,” says Prentiss Cox, an associate professor of clinical law at the University of Minnesota. “It’s a white collar mugging.”

Why would a supposedly reputable company decide to make money this way? Maybe it’s because the third party marketer shields them. When the charge shows up on the customer’s monthly statement, it usually has the name and phone number of the membership club, not the original retailer.