Online 'Mystery Charges' Companies End Controversial Sign-Up Practice

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Post-transaction companies Webloyalty and Vertrue have joined Affinion in revamping controversial registration procedures that allegedly duped consumers into signing up for paid membership programs.

All three companies will now require consumers to re-enter all 16 digits of their credit cards to enroll in discount clubs after making purchases. Webloyalty and Vertrue notified lawmakers on the Senate Committee on Commerce, Science and Transportation last week about the change, while Affinion announced the new procedure earlier this month.

Sen. Jay Rockefeller (D-W.Va.), who launched a probe in May of so-called "mystery charges" by the three companies, called the move "a step in the right direction for American consumers." But, he added, "there is more work to be done to combat the misleading tactics companies are using online."

A Webloyalty spokesperson said the company revised its sign-up process "to address the concerns of the Senate Commerce Committee." The move took effect Jan. 13. Vertrue said in its letter to Rockefeller that the company instituted new procedures last month.

Web companies have garnered more than $1.4 billion in the last decade by collecting fees from millions of consumers who unknowingly signed up for paid services online, according to a recent report by the Senate Commerce Committee.

Webloyalty, Affinion and Vertrue targeted consumers who had just made purchases at online retail sites like Fandango. The post-transaction companies would send pop-up ads to those consumers, offering them discounts.

In the past, people who clicked on the pop-ups landed on a site where they could enroll in coupon programs simply by providing their email address and clicking a 'yes' button. The ecommerce sites then shared credit/debit card information with the post-transaction companies, which then began charging consumers monthly fees of up to $12. Many Web users said that they did not realize the companies were going to charge their credit cards.

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