Crackdown On Loyalty Program Scams Shows How Ridiculously Successful They Were

from the scam,-scam,-scam dept

It's no secret that there are a bunch of companies out there that trick users into signing up for a regular monthly subscription service that's usually nothing more than an excuse to charge your credit card every month. Many of these are incredibly sneaky, such that many users have no idea they signed up for it until they get their credit card statements. Even worse, many of the "tricks" involve getting legitimate sites to offer these "services" to their users -- and those included Continental Airlines, Classmates.com, Priceline, 1-800-Flowers and many others. The government is finally cracking down on some of these, but its latest investigation -- into just three such services (and there are a bunch more) named Webloyalty, Vertrue and Affinion -- found that those three alone brought in over $1.4 billion. Not surprisingly, the folks who work there know quite well that they're misleading users and tricking them into signing up for stuff they don't want and don't need.

It's a bit surprising, by the way, that the investigation was done by the Senate Committee on Commerce, Science and Transportation, rather than the FTC, who you would think would be in charge of stopping these sorts of activities. Of course, perhaps that's because the FTC has been quite busy with other scammers, such as BlueHippo, who the FTC had already reached an agreement with before and then decided to ignore it. The company basically collected millions from individuals without ever sending the promised computers. At one point, BlueHippo had delivered just one computer. After the FTC started investigating more thoroughly, suddenly BlueHippo found more computers to send, but still wasn't delivering computers to many of the people who qualified.

It's really stunning how many blatant scammers there are out there, who are able to get away with these things for so long.

Filed Under: loyalty programs, scams
Companies: affinion, bluehippo, vertrue, webloyalty