A prominent Senate Democrat has stepped up his inquiry into the dubious practices of online commerce, asking for information from credit card companies about their role in Web marketing schemes that appeared to result in consumers getting billed for unauthorized charges.
John Rockefeller (D-W.V.) on Thursday sent letters to Visa, MasterCard and American Express as part of his committee's ongoing probe into online membership clubs that seek to enroll online consumers after they have made a purchase on the Internet.
"There are more than 4 million American consumers whose credit cards are being charged by mysterious membership clubs after shopping online, and most of these 4 million consumers don’t even know it’s happening," he said in a statement.
Rockefeller's committee has been looking into the practices of so-called post-transaction marketers for months, and recently held a hearing on the issue, inviting academic researchers and consumers to testify. An aide said that he is planning another hearing that will invite testimony from some of the marketing and e-commerce firms in question.
The practice Rockefeller is going after involves the pop-up windows that appear on some e-commerce sites after a customer has completed a transaction. The pop-ups offer a coupon or some other incentive, but once a user clicks through, he can be automatically enrolled in a club that automatically bills his credit card for a monthly membership fee.
The practice stems from the partnerships e-commerce vendors have signed with Internet firms that specialize in the post-transaction marking, agreements which can see credit card numbers and other information pass from the hands of a trusted merchant to largely unknown marketing outfits.
In the face of the inquiry, the marketing companies at the center of the probe have altered their practices to give consumers more meaningful notice that they are being invited to join a fee-based club.
Webloyalty, one of the firms in question, said that it "cannot and will not enroll a consumer in one of our discount membership programs without that individual's express consent, and, contrary to widely published reports, enrolling in our discount clubs requires more than a single mouse click."
But Rockefeller and other lawmakers said at last month's hearing that the policy changes the firms were promoting still seemed to leave consumers in the dark.
Rockefeller is now asking for information from the top three credit card merchants regarding their dealings with the marketing firms and their chargeback policies -- the mechanism for consumers to dispute bogus charges.
"This next step in our investigation will help us better understand how millions of American consumers' credit card accounts can be charged every month for services they don't want," Rockefeller said.
Senator Continues to Press on Shady e-Commerce SchemesCredit cards get their licks in now before consumer law takes effect
