financial services

Visa Strengthens Online Transaction Security

Credit card giant Visa has become the latest company to change its procedures in response to a Senate investigation into whether consumers were being duped into signing up for paid membership programs.

The financial company said Tuesday that it will now require consumers to re-enter their credit card numbers online before processing payment. That new policy will prevent e-commerce sites from directly forwarding consumers' credit card data to post-transaction companies that, in turn, register consumers in discount clubs.

"Consumers who shop online using their Visa cards should be confident that they will only be charged for the products and services they legitimately intend to purchase -- not those that are foisted on them through deceptive data pass schemes," company executive Martin Elliott said in a statement.

A Visa spokesperson says the company always officially prohibited merchants from passing along data to post-transaction companies, but didn't specifically require consumers to re-enter their credit card information before being charged.



Visa's move comes almost one year after Sen. Jay Rockefeller (D-W.Va.) launched a probe into data pass marketing. Since the investigation began, the three major post-transaction companies -- Webloyalty, Affinion and Vertrue -- have changed their practices to require consumers to re-enter all 16 digits of their credit cards to enroll in discount clubs after making purchases.

Webloyalty, Affinion and Vertrue target consumers immediately after they have made purchases on online retail sites like Fandango by sending pop-up ads that offer 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 they did not realize the companies were going to charge their credit cards.

The Senate Commerce Committee reported recently that Web companies garnered more than $1.4 billion in the last decade through these types of programs.

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