The Subscription Trap
Web Shopper: $10 Back Led to $45 Gone
Restaurant.com's slogan is "eat, drink, save money," but don't tell that to Bellingham, Washington, resident Kari Glennon. She thinks the site's motto should be "eat, drink, and watch out for surprise charges on your credit card bill."
Glennon's problems began in October 2008, when she bought several Restaurant.com gift certificates for her coworkers. The next month she noticed a mysterious $14.95 charge on her Visa credit card statement for "Shopping Essentials." Glennon shares the account with her husband and assumed that the charge was his. Three months later, she realized that she'd now been charged the same amount three months in a row, so she decided to investigate.
Glennon called a toll-free phone number that she found online for Shopping Essentials and discovered that it was a shopping club owned by Norwalk, Connecticut-based Vertrue; the club offers discounts on department store gift cards and charges members $14.95 a month for belonging to it.
"I told the woman on the phone I had no recollection of joining the service," Glennon said. The rep told her that the charges originated from her Restaurant.com purchase. "But how did you get my credit card number?" she asked. The representative told her that Restaurant.com had given the credit card data to Vertrue after she had clicked on a "$10 cash back" banner ad and input her e-mail address.
"I don't recall clicking on anything, and I did not give my credit card information to Restaurant.com for the purpose of signing up for a membership," Glennon says. "I felt taken advantage of."
Millions of unsuspecting online shoppers have had experiences similar to Glennon's, according to investigators examining similar marketing offers at hundreds of mainstream Websites.
Sharing credit card information between companies may be controversial, but it's still perfectly legal--for now. However, the business of posttransaction marketing has caught the attention of the U.S. Senate Committee on Commerce, Science and Transportation, which launched a probe last year to determine whether this type of marketing should be banned. [Here is a long (2 hours, 15 minutes) video of the committee's hearing on "Aggressive Sales Tactics on the Internet and Their Impact on American Consumers ."]
Thousands of consumers have complained to the Better Business Bureau, saying that they, like Glennon, inadvertantly became members of a Vertrue service despite having no memory of signing up for it.
In response to the Senate committee's investigation, Vertrue earlier this year voluntarily modified its marketing offers so that prospective club members must now input their credit card number a second time to confirm that they want the membership.
Restaurant.com spokesperson Tony Bombacino says that his company cut ties with Vertrue in November 2009 after the Senate committee began investigating the business practices of major posttransaction marketers Affinion, Vertrue, and Webloyalty. "We felt it would be best to end our relationship and find out what the Senate investigation concluded," Bombacino said.
Restaurant.com has an A+ rating with the BBB, according to Bombacino. He also says the number of complaints that his company received from customers about its relationship with Vertrue was low. Vertrue has an F rating with the BBB because of a "failure to honor commitment to arbitrate or mediate disputes," according to the BBB.
When Glennon asked Vertrue for a refund, its representatives told her that they could credit only the most recent charge back to her Visa account. If she wanted the outstanding $29.90, they told her, she would have to mail the request to Vertrue's postal address, and the refund might take up to six weeks to arrive. She says that she received it three weeks later. Representatives at Vertrue declined to comment on Glennon's experience, but they say that the company has always allowed members to cancel an account and receive a refund over the phone.
"I got my money back," Glennon says. "But what about all the [Shopping Essential] customers who are still paying $14.95 a month for a service they don't even know they signed up for?"
Vertrue says that it is cooperating with the Senate committee investigation and making changes to its business.