Wednesday, November 18, 2009

Senator Goes After Web Membership Clubs

Senator Goes After Web Membership Clubs; PCWorld

A U.S. senator calls for new regulations on Web membership club offers.

The U.S. Congress needs to take action to protect consumers tricked into signing up for membership clubs that charge a monthly fee when they buy products or services from other Web sites, the chairman of a U.S. Senate committee said Tuesday.

Many legitimate Web sites selling items such as flowers or airline tickets have partnered with companies that lure consumers into signing up for monthly payments after being promised cash-back rewards, said Senator Jay Rockefeller, a West Virginia Democrat and chairman of the Senate Commerce, Science and Transportation Committee.

Rockefeller called the practice of membership clubs "darned disturbing." In many cases, a coupon or other offer is presented during the checkout process on a legitimate Web site, and if a customer agrees to the offer, they have a couple of days to cancel before being charged a monthly fee.

"What's happening is that many online merchants have decided to betray their customers' trust," Rockefeller said. "For a few extra bucks in profit, these merchants pass their consumers' personal billing information onto mysterious companies."

The Commerce Committee on Tuesday released the results of an investigation into these membership clubs. Three Internet companies, Affinion, Vertrue and Webloyalty, have generated more than US$1.4 billion in revenue through "misleading" tactics, the committee report said.

The three companies have enrolled more than 30 million consumers in their programs, and more than 450 Web sites and retailers have partnered with the three companies and received about 50 percent of the revenue from the membership clubs, the committee said.

Comment: Rockefeller, the man who said, and I'm paraphrasing, the US Government would have been better off if the Internet was never invented; meaning there is a means of communication Congress hasn't yet taken control of and it ticks him off. And he wants to do just that, take over the Internet. That's what it really means when the oligarchs call for new regulations, taking over some facet of our lives.

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