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More internet marketing techniques maybe endangered via the .gov

by MichaelHiles
3 replies
In particular, upsells.

Senator Jay Rockefeller is on the warpath.

Web companies have earned more than $1.4 billion in the last 10 years by duping millions of online shoppers into paying monthly fees for services they didn't want, according to a new Senate report.


The report, "Aggressive Sales Tactics on the Internet and Their Impact on American Consumers," by the Committee on Commerce, Science and Transportation, focuses on strategies used by the post-transaction companies Webloyalty, Affinion and Vertrue, as well as their business partners, including sites like Classmates.com, Fandango and Orbitz.

"In exchange for 'bounties' and other payments, reputable on-line retailers agree to let Affinion, Vertrue, and Webloyalty sell club memberships to consumers as they are in the process of buying movie tickets, plane tickets, or other online goods and services. The sales tactics used by these three companies exploit consumers' expectations about the online 'checkout' process," states the 35-page report.

The paper grows out of an investigation spearheaded by Sen. Jay Rockefeller (D-W.Va.) of so-called "mystery charges." The probe was launched in May, after thousands of people complained that they had unwittingly enrolled online in paid membership programs.

"American consumers shouldn't have to worry that their favorite websites are ripping them off during the checkout process," Rockefeller said Tuesday. He added that the committee "needs to start thinking about the legislative steps we can take to end these practices."

Companies in the post-transaction space target consumers who have just made purchases at sites like Orbitz and Fandango. The companies send pop-up ads to those consumers, offering them discounts.

In the past, people who clicked through landed on a site where they could enroll in coupon programs by providing their email address and clicking a 'yes' button. Once they did so, the e-commerce sites shared credit/debit card information with the post-transaction companies, which then began charging consumers monthly fees of between $9 and $12 and sending them coupons and discounts.
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More here... http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=117567
#endangered #gov #internet #marketing #techniques
  • Profile picture of the author CDarklock
    Originally Posted by MichaelHiles View Post

    In particular, upsells.
    Not exactly. It's sharing payment information with other companies.

    See, here's the thing. Most people aren't aware that when you give your credit card details to a company, you technically need to have some explicit agreement that they can't charge you for something else later... or they can. Legally.

    Most people also aren't aware that if you give your credit card details to company A, and then agree that they can share your "personal information" with company B - oops! Credit card details are personal information.

    So what they're on the warpath about is this.

    You go buy something from company A, and give them your payment information. They ask if you'd like free stuff from company B. You say "sure," and they send you to company B.

    There, company B asks you for some token personal information to establish a relationship. And once you give it up, company B goes back to company A to exchange your personal information, including your payment information, which they then use to make further charges in accordance with the fine print.

    This is legal because of a complex interaction among laws and legal precedents that have perfectly reasonable justifications. But if you know how to do it, you can line all those things up just right to create a legal tunnel where you can get someone's email address... and then charge their card as much and as often as you like.
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    "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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  • Profile picture of the author MichaelHiles
    Okay, it was more of a simplification on my part.

    But I was thinking in terms of add on products from 3rd parties as still being "upsells" in general, which seem to also be on the radar because of the hot button issue with obfuscated continuity programs.
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    • Profile picture of the author CDarklock
      Originally Posted by MichaelHiles View Post

      But I was thinking in terms of add on products from 3rd parties as still being "upsells" in general, which seem to also be on the radar because of the hot button issue with obfuscated continuity programs.
      What the FTC is fighting is two things: the customer getting less than they thought they were buying, and the customer paying more than they thought they were paying.

      If your customer doesn't have a solid understanding of what they get and what they pay, you shouldn't be selling to them.
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      "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
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