The Subscription Trap

Making It Clearer

In January, in response to the Senate Commerce Committee's investigation, Affinion, Vertrue, and Webloyalty agreed to alter their online offer pages. Instead of collecting credit card data directly from the host Website where the offer appears, the companies now require consumers to enter their 16-digit credit card information a second time to establish a membership (and to receive any special cash-back or rebate offer).

Since Webloyalty began requiring consumers to input their credit card numbers a second time, the company has seen a drop in enrollments, spokesperson Beth Kitchener says, though she declines to specify how big the drop has been. "If there is confusion about how people enroll in our programs, we are happy to address those concerns," Kitchener says. "We don't want customers who don't want us."

Rockefeller says that requiring consumers to input their credit card numbers twice is a "step in the right direction," but he still views the companies' offers as misleading and is pushing for further changes in their business practices. Moreover, because the three companies adopted the change voluntarily, other firms that engage in posttransaction marketing need not follow their lead.

Seeing for Ourselves

During a shopping excursion at Spiegel.com, I discovered how easy it is to mistakenly sign up for a membership program. After I made my purchase and progressed to the order summary page, a window offering "free shipping" popped up. Looking closely, I realized that that the offer didn't apply to my current purchase; instead, it was good for my next purchase at Spiegel.com and came "Compliments of Spiegel Privilege Pass." I clicked 'Continue' and found myself on a Web page that stated prominently at the top "Claim your Free Shipping Certificate Now!"

Step 1: At checkout, a pop-up box offering free shipping appears on the order summary page.
At the bottom was a text field instructing me to enter an e-mail address as an "electronic signature" agreeing to "activate your privilege pass membership." In the lower left-hand corner of the browser was a gray box with text that in several browsers appeared slightly blurry spelling out the "Offer Details." The details explained that "activating your membership" meant agreeing to pay a $1.95 "activation fee"; furthermore, if I didn't cancel my membership within 30 days, the club would begin debiting my credit card at a rate of $14.95 per month.

Step 2: Fill in an e-mail address field “To claim your Free Shipping Certificate.”
What happened next surprised me. I typed my e-mail address in the text field--but before I clicked anything else or pressed Enter on my keyboard, the Web form seemed to register my e-mail address automatically and jumped me to a page welcoming me to Privilege Pass. This page said that within 24 hours, I would receive a confirmation e-mail, a "Shipping Certificate," and a user ID and Password to access my Privilege Pass benefits. When the confirmation e-mail arrived, it included no mention of fees associated with membership and no instructions on how to cancel.

Step 3: Process complete. Congratulations on joining Privilege Pass. Your recurring membership dues will begin appearing on your credit card statement before you know it.
Privilege Pass is a discount membership program that offers discounts on travel- and entertainment-related purchases. The program is run by Encore Marketing International, a privately held company in Lanham, Maryland. The company did not reply to repeated e-mail and telephone requests to be interviewed for this story.

Representatives of Signature Styles, the owner of the Spiegel brand, say that it has not received many complaints about the way its partner markets the Spiegel Privilege Pass. Spokesperson Parker Block says that Signature Styles is currently in discussions with Encore Marketing International to update the way Spiegel's Web site enrolls consumers in the Privilege Pass monthly subscription membership. "We are developing a ways to be more transparent to consumers to make their experience more satisfying to government, consumer advocacy groups, and consumers," Block said. The company will change the process in the near future, he said.

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