Beware of the 3 Musketeers of the Online Conning Industry
Tue Dec 29, 2009, 9:05 am | Leave Comment
John D. (Jay) Rockefeller IV, Chairman of the U.S. Senate Committee on Commerce, Science, and Transportation, a while back announced the release of a new investigative report named as, “Aggressive Sales Tactics on the Internet and Their Impact on American Consumers.”
The Committee named three online companies – Affinion, Vertrue, and Webloyalty – that have been conning the consumers out of their hard-earned money. I have given you links to their sites to make a point that they seem just ordinary commercial websites and on the surface they don’t appear to be schmucks and crooks. Beware of the 3 Musketeers of the Online Conning Industry.
The Committee’s findings in a Nutshell
- The Schmucks – The 3 Musketeers exploit consumers’ expectations about online shopping to trick them into joining their membership clubs.
- The Consumers – Consumers often do not know [what else is new?] these companies have their credit card numbers until they start seeing charges on their monthly statements.
- The Money the Schmucks Made – The three companies and their e-commerce partners have earned over $1.4 billion in revenue with their misleading tactics. Like I said before, I am in the wrong business.
- The Money the Schmucks’ Partners Made – Eighty-eight companies have made more than $1 million by partnering with the 3 Musketeers including Classmates.com, which made more than $70 million.
- The Money the Schmucks’ Children Made – More than 450 e-commerce websites and retailers have partnered with these 3 Musketeers to employ aggressive sales tactics against their online customers splitting the revenue about 50-50.
- The Schmucks Growing Clubs – There have been more than 30 million consumer enrollments in these clubs and several million people are unknowingly enrolled in these clubs at any one time.
- The Lies and The Cheats – Almost no one receives the “cash back award” [what else is new?] that the 3 Musketeers offer to online consumers at the time of enrollment.
Moral of the story
The tactics that the Committee has pointed out in its findings are innocent at best but worst in results and consequences to the consumers. There must be a lot more that the Committee missed but as long as we have these three pointed out by our friends in the U.S. Senate, we sure would try to avoid these and similar companies.
What do you think?
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