Internet Marketer Webloyalty Settles NY Complaints

NEW YORK (AP) — An Internet marketing firm has agreed to pay $5.2 million to settle complaints that it duped consumers into signing up for discount clubs with tough-to-notice monthly fees., based in Norwalk, Conn., also has agreed to give some of its customers refunds and permanently abandon some of its past sales tactics, New York Attorney General Andrew Cuomo announced Tuesday.

The settlement is similar to one announced last month with another promoter of discount clubs, the Affinion Group.

Both companies had come under fire from Cuomo and other regulators over tactics critics called deceptive.

The basis for those complaints was a practice in which Internet shoppers were presented with cash back offers on the websites of major retailers. If shoppers accepted the offers, they would be enrolled in trial periods for discount clubs offering things like cheap movie tickets in exchange for small monthly fees.

Some shoppers complained that they either never saw or misunderstood the fine print and only realized they had joined paid services after small charges began appearing on their monthly credit card bills.

Webloyalty said in a statement Tuesday that it was “making it easier for consumers to know what they are buying and how they are paying for it.”

In January, it also began requiring customers to enter their full credit card numbers during the enrollment process.

Previously, if consumers entered their e-mail addresses and clicked on a button that said, “Yes, sign me up,” their billing information was passed automatically from the Internet retailer. That confused some customers who assumed that if they were never asked for a card number, they would never be billed.

A number of online retailers that had allowed Webloyalty to piggyback on their websites also have agreed to pay a collective $3.3 million in penalties, Cuomo’s office said.

The largest amount, $1.2 million, was paid by the travel reservation service Orbitz. Orbitz Worldwide has said previously that it had revamped the Webloyalty sign-up process as a result of the complaints. A company spokesman didn’t immediately respond to a phone message and an e-mail Tuesday.

Shutterfly Inc., which operates an online service for storing, sharing and printing photos, agreed to pay $952,200. A spokeswoman did not immediately return a request for comment.

(Copyright 2010 by The Associated Press. All Rights Reserved.)

  • DanTe

    So this case was dragged out from at least Jan, just to be announced conveniently at election time? If Cuomo really cared, he would have shut it down sooner.

    So how come libturd media keeps publishing Cuomo-feel-good pieces instead of asking Cuomo what he was thinking of when he was in charge of HUD. You know, when HUD mandated that FNMA and FHLMC come up with some creative ways for people who can’t afford it to by a house. And once FNMA and FHLMC set up the ponzi scheme, banks were forced to “accommodate” it and sell it to the market. I believe this mortgage scheme thingie is what this current economic mess is all about? Or have you libturds conveniently forgotten that little event too? You really thought banks wanted to lend to deadbeats if they weren’t forced to do so?

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