A U.S. Senate report has revealed that retailers (a number of which you may already know and trust), have accepted as much as $792 million to share customers’ credit-card information with direct marketing companies. Could your card number have been one that was shared? Would you have known?
The companies engaging in such practices have been getting away with it because of terms buried in fine print, where customers accept offers without having to share their credit card info themselves, placing a certain level of trust in the retailers that are profiting off of sharing their info.
The executive summary of the Senate document reads as follows:
In May 2009, Chairman Rockefeller launched an investigation into a set of controversial e-commerce business practices that have generated high volumes of consumer complaints. Since that time, Commerce Committee staff has been investigating three Connecticut-based direct marketing companies – Affinion, Vertrue, and Webloyalty – as well as the hundreds of online websites and retailers that partner with these three companies to sell club memberships to online shoppers. Although this investigation is not yet complete, it is clear at this point that these three companies use highly aggressive sales tactics to charge millions of American consumers for services the consumers do not want and do not understand they have purchased.
Chances are, you’ve encountered the “offers” that utilize this strategy. TechCrunch provides a sample screenshot:
So who are the companies that have been selling credit card information? Well, the following were paid over $10 million each to do so:
– 1-800-Flowers.com
– Buy.com
– Classmates.com
– Columbia House
– Confi-Check
– Expedia/Hotels.com
– Fandango
– FTD
– Hotwire
– InQ
– Intellius
– MovieTickets.com
– Orbitz
– Priceline
– Redcats USA
– Shutterfly
– Travelocity
– US Airways
– VistaPrint
Dozens more were paid between $1 and $10 Million. I won’t name all of them (there is a full list here), but Yahoo is one of them. So is Avon, Barnes & Noble, eHarmony, Half.com, Pizza Hut, TimeLife, and Victoria’s Secret.
People have often expressed concerns about buying stuff online from brands that they haven’t heard of. It turns out that some of the biggest brands are not exactly as trustworthy as some may have thought. Customers are not pleased.
For the offending brands themselves, this has to be a PR and online reputation management nightmare. Read the whole report here (pdf) if you’ve got some time on your hands.
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