Legal, e-commerce, Web 2.0
Class-Action Lawsuit Unfolding in Boston Against Webloyalty, Fandango, Priceline, and Various Web Retailers Alleges Widespread “Coupon Click Fraud”
Seth Shulman 12/19/07
(Page 2 of 2)
against Webloyalty over the past 36 months and gives the company an “unsatisfactory record” due to what it calls “a pattern of complaints concerning deceptive marketing/selling practices and unauthorized charges to consumers’ credit cards.” Even those figures only hint at the level of customer dissatisfaction. A cottage industry of on-line sites like Ripoff Report warn about the alleged scam. In fact, a Google search on “Webloyalty fraud” garners an eye-opening 10,500 hits.
For their part, Webloyalty principals argue strenuously that the company has done nothing wrong and that it adheres to all federal and state laws governing online transactions. “We intend to fight this case,” Rick Fernandes, Webloyalty CEO and co-founder, said in a phone interview last week. “As this goes forward we will show that the allegations in this case are not true.” Fernandes and Webloyalty spokesperson Beth Kitchener stress that Webloyalty offers customers clear and sufficient information online detailing the rewards service they sign on to. As Fernandes puts it: “We have the screen pages to prove that customers were notified about the price points and services we offer.” Fernandes also brushes away questions of complaints by stressing that his firm offers cancellations “without questions” to any subscriber who calls to complain. He maintains that, on many websites, his company doesn’t ask potential subscribers to enter their credit card information because the service “comes off the back end of an online transaction” they have just made. “We want to make it easier for customers,” he says.
Legal or not, Webloyalty’s business plan is proving undeniably effective. Fernandes says that his company’s seven separate rewards programs—including “Reservation Rewards,” “Shopper Discounts and Rewards,” “TravelValues Plus,” and “Wallet Shield” (a so-called credit monitoring and identity theft protection program)—are subscribed to by “millions of people each year.” And just last week he was named by Silicon Alley Insider as one of the year’s 100 most influential people in New York’s digital business community.
Webloyalty’s swelling subscriber list has made it one of the fastest-growing firms in the country. Although privately held, the company disclosed revenues of $143 million in 2006, and it ranked 202nd on Deloitte and Touche’s 2007 Technology Fast 500 list of the fastest-growing technology, media, telecommunications, and life sciences companies in North America. The rankings, based on fiscal year revenue growth from 2002–2006, reveal that Webloyalty grew 860 percent during this period. While most of the company’s arrangements with its clients remain undisclosed, its business strategy seems to be based on convincing major Web retailers to work with it by offering them a percentage of the consumer revenues Webloyalty receives.
Massachusetts law prohibits lawyers in an ongoing case from commenting publicly in ways that might influence a jury. But several lawyers involved in the case, who asked not to be identified, said that they believe the action could potentially set an important precedent about exactly what constitutes “sufficient notice and consent” in an e-commerce transaction. Along these lines, company documents filed in the case claim that Webloyalty sends e-mail notification to consumers who enroll in its programs, but the lawsuit alleges that the e-mails are specifically designed to get caught in spam filters so many subscribers never see them. That way, the suit alleges, the credit card charges can often accrue for many months before consumers even spot them.
The case schedule indicates that the suit will likely drag out all through next year and beyond. The deadline for the submission of documents in the legal discovery process has been set for May 26, 2008. We’ll be sure to follow along. In the meantime, the case stands as a reminder of what an untamed jungle online commerce can be—and how unsettled the pertinent case law is about it. With the height of the holiday season at hand, online shoppers would do well to exercise caution, and to scrutinize their credit card bills each month for any suspicious or unauthorized charges.
“The Internet is a relatively new medium, and people need to learn and adapt to how it operates,” says Webloyatly’s Fernandes. In the end, Fernandes himself offers online shoppers perhaps the most useful advice when he warns: “People should pay attention and not just click through offers on their screens.”
[Update August 27, 2009, 9:00 a.m.: See our new story on the settlement of the Webloyalty class-action suit.]
12/21/07 5:47 pm
I want to be included in the class action lawsuit against PriceLine !!!
How do I do this?
12/25/07 11:13 pm
I never signed up for anything like this, and I was charged $10 a month just like everyone else, I would like to be included in the lawsuit too! I was signed up without authorization after a purchase and a $10 discount.
1/1/08 4:39 pm
No where does this article mention the obvious blind-eye that Visa and Mastercard have been giving to this. Both Visa and Mastercard have policies forbidding this practice of sharing credit card information yet to my knowledge have not cut WebLoyalty off from accepting credit cards.
1/4/08 12:30 pm
I too have been scammed by these guys. I’m sure 99% of their “customers” never print 1 coupoun or take advantage of any discounts they may have. And you can’t find out what they offer without disclosing more personal information! If anyone knows how to join the lawsuit, I’m ready.
1/9/08 1:36 pm
I have also been scammed by these jerks. For two months they made a $10.00 charge against my credit card. I am most interested in knowing which company allowed them to have my credit card number. My credit card is Discover.
1/9/08 7:47 pm
I have been victimized by Webloyalty as well. I noticed there was a ten dollars deduction from my account since Oct. I contacted my bank and with the result, I had to get a new debit card. I am furious the fact that I could not access to use my debit card to purchase anything while I was waiting for a new debit card. I am glad to see there s a lawsuit against Webloyalty. It needs to be stopped!
1/15/08 4:47 pm
Same story here. I booked a flight on SkyBus out of Columbus, OH, then got a pop-up suggesting “you just ordered Skybus, get a $10 discount on your next purchase.” At no point am I asked for Discover cc# info, only that I submit my email address twice for “confirmation”. I get coupons for free pizza all the time that dont even require a purchase, so it seemed legit. But the rep at scamco insisted that entering my email constituted acceptance of their service. Nuts!
I feel bad for Skybus because they allowed this to happen. Frankly, I cannot believe this does not constitute fraud; it is certainly outright deception. Cleary there is a big difference between going to rewards.com website, which you must give cc info, and this utterly deceptive pop-up. I then looked at Skybus’ Privacy policy and it does say they use a third party billing service to process their ticketing. I have written to Skybus hoping they stop doing business with these scumbags.
1/19/08 10:20 pm
I received class action lawsuit paperwork in the mail, but thought it was a scam, so I destroyed it. Now I am finding out the “WLI* ReservationRewards $10 debit on 12 months of my VISA bill was bogus. I should not have thrown out the paperwork, because I saw on the news that I would have gotten a $25 rebate check because of that suit. Does anyone know how to request an additional copy of that paperwork?
3/7/08 11:31 am
Ok, add me to the Ripped List too …. Ordered flowers for my mother’s funeral (2/07) through ProFlowers.com and got scammed through Reservation Rewards for $120.00 taken from my bank account!
3/21/08 2:38 pm
Barbara, if you call the number on your credit card statement and put up a huge fuss, they will refund the money. I know, happened to me, too, through Fandango. :(
3/30/08 11:37 pm
I was just scammed through FTD. They claimed they didn’t know about it, though I’ve found complaints about FTD’s partnership with Webloyalty going back years. I’ve also read that the “partners” get their cut. Why else would they go along with it? They should be held responsible since they are essential to the scam.
4/2/08 2:35 pm
They got me too when I purchased flowers online through FTD.. Over $100 so far. I just called to cancel today when I noticed what has been happening to my account over several months.
4/8/08 2:18 am
Great article on this scam. Disgusting.
They got me too, through Allegiant Air’s Website. I don’t buy much online for this very reason.
The Reservation Rewards monthly “fee” is up to 12 bucks a month now.(March 2008) Fortunately, I caught it right away. When I called their number to cancel my so called membership and demand a full refund, the rep told me he’d refund the March 18th payment, but I would be charged for Aprilimmediately I said no way, the April 18th payment due date is over a week away! He attempted some lame excuse, I told him to forget it, I know what their company is all about and politely asked for the full refund again, he dropped the tough guy charade.
I called my credit card company to complain about this company, they seemed to know all about them and recommended to cancel the card immediately. What a hassle. I hope this is the end of it. Sign me for the class action if you need proof of more “victims”.
5/11/08 12:08 am
I caught Reservation Rewards billing me. Called them up and they agreed to cancel my membership. I told them that that wasn’t good enough and told them I planned to contact my attorney general. At that point they agreed to refund all my payments. I’ll be interested to see if they follow through. I may well sue them anyway in small claims court. It would force them to either come to my state or hire a lawyer at considerable expense. I also plan to tell Hertz that I will not use them again (they hooked me through Hertz).
5/21/08 9:56 am
I just bought some games for christmas, clicked a discount coupon and then charged 10 dollars a month on my card. After months of trying to figure out where my money was going I called the contact number…there is no easy cancellation button on their site. I have paid them 10 dollars a month for nothing for 6 months
5/22/08 12:32 am
They scammed me a couple of years back.I complained and got a refund .Since then I have been using a visa virtual CC with set amount for each online purchases I make, and everytime I see that $10off offer at checkout I click yes and use the coupon on subsequent orders from the vendor.So far over 15 times at Buy.com.
6/22/08 8:26 pm
I just discovered I’ve been victimized by Reservations Rewards for several months. Looks like they’ve been getting us for $10.00 a month since February. I think I bought some books online then. Tomorrow we’re calling to find out whats up.
9/18/08 2:22 pm
I would like to be included the class action lawsuit against priceline.com. They ripped me off 528.00 without my authorization/
How do I go about becoming a part of this?
10/8/08 2:11 pm
I just discovered Reservation Rewards scammed me out of $260.00!
So what was the outcome of this lawsuit?
10/8/08 2:24 pm
I forgot to mention, Reservation Rewards received my personal information from an online catalog, Collections Etc.
10/11/08 11:12 pm
Unbelievable, this scam is like the Energizer bunny, it keeps on going.
Someone has mentioned that Visa and Mastercard turn a blind eye to this dreadful scam. How about the fact that Deloitte Touche has “honored” this company for making huge profits by preying on unwilling participants. Let them share the shame.
http://www.webloyalty.com/about-customer-loyalty/news-events/press-release/fast50-2006/
10/29/08 10:49 am
After a complaint to the BBB, and filing complaints with my DA and Attorney Generals office’s, Reservation Rewards has refunded the money they stole from me! Jerks need to be put out of business!! I also contacted Collections ETC, and informed them that I would NEVER do business with them again for taking part in this scam!
11/28/08 5:53 am
This is unbelievable. I just realized I have been getting scammed for $12 a month as well. I purchased tickets from Fandango for the first and last time about 5 months ago and they have been getting me since. I remember Fandango OFFERING A REBATE FOR MY PURCHASE!!!!!!!!! So I accepted it! How can anyone in their right minds accept that as an invitation to take my credit card information and charge me a monthly few. This is just unbelievable and unacceptable. I’m applying to law school soon, and I would love to be involved in this lawsuit as well. This kind of bull just fuels the passion I have to get into law school and put an end to this crap.
$86 MILLION IN REVENUES LAST YEAR?! I just can’t believe it, they have millions of subscribers!!!! How can this happen? How many of those subscribers actually know they are subscribed? Even if that number is only %15 these people should be thrown in jail for stealing like this. We get Martha Stewart for insider information, but these people are allowed to stick their sticky little fingers into our wallets without even telling us? I’m sorry, I didn’t read the disclaimer either, along with the millions of others out there who according to this moronic company need to “pay attention.”
And I agree with the other posts about visa and mastercard. I’ve been scammed through my bank account, and I will be having a word with Bank of the West tomorrow. This scam report is all over the web, and these financial institutions just take a blind eye to this all?
In the economy we are in today, this company is making millions off stealing information and money from people who have little to spare. Fandango, Expedia, and all of the companies who are in partnership with them should be subject to this lawsuit as well, this is unacceptable for these companies to give away our information like this.
At a time when something as precious as consumer confidence can drive the market up drastically or to its all time lows, as we have seen in the last few weeks, these prominent companies like Fandango, Expedia, Pricline, and all who are affiliated with WebLoyalty are allowing something as shady as this to be happening? Is this what we get for living in the kind of media centric world we live in today?
THIS IS FRAUD, PLAIN AND SIMPLE.
Can anyone tell me what the hell Webloyalty has been doing for me all this time? I purchased $20 tickets to see Batman about 5 months ago, and have been charged $48 so far (as far as I know). And what in that amount of time has WebLoyalty done for me? What have I received in return? A rebate coupon that I never used that was for only $10? Who in their right mind would not call this theft?
I will spend as long as it takes to do as much as I can to put an end to practices like this. I don’t even care about the $48, even though I will get it back. But its not about that, its about the fact that someone could just put their hand in my pocket without me knowing it, and the companies that I put my trust in are the ones that put these sticky fingers in my pocket in the first place. What does this say about the movie business? Nobody can afford to go already, and we actually can we end up getting screwed and losing even more money that we couldn’t afford in the first place to see the movie?
I will admit, this was a smart idea, so far it has blossomed into a great scam. But just like all good thieves should know, you have to know where to draw the line. The fact that this company thought that they could get away with this for this long, and to have accumulated the amount of money they have in the process? Are you kidding me? I am ashamed for falling for this scam and not noticing it until now, but I would be far more ashamed if I didn’t put my foot down to bring an end to injustices like these.
12/5/08 12:08 pm
I have been a member of “Big Fun” all year because of a priceline purchase. I just threw their junk out, didn’t even pay it any attention. I’m waiting for my refund.
12/23/08 2:41 am
I was scammed through campusfood.com. Same thing as everyone else.
12/27/08 9:41 pm
I was scammed through allegiant air. I was charged two different $12 charges for two months ($48) – I emailled allegiant air to ask why they gave away my credit card info. I thought that was illegal.
1/16/09 11:01 pm
Fandango Scam !I noticed on my AMEX bill that I have been paying 10 $ a month since APR 2007, so I have paid $210 dollars. They got my AMEX # from Fandango. Today, AMEX decided to refund my 6 months of the $10 per month, and told them not to bill the card again. I just thought it was something my wife had subscribed to me and she thought it was something I had set up. What a scam ! Why isn’t someone prosecuted ?
1/28/09 12:20 am
Here we go:
Corporate Headquarters
101 Merritt 7, Fourth Floor
Norwalk, CT 06851
1/30/09 2:49 pm
They got me also. I just noticed that I have been paying the ten dollars for awhile thinking my husband was checking the bills. We are out about $120.00. I called a few times before I could even get the call to go through and was told it would be canceled next month and would get our money back. We’ll see won’t we.
1/30/09 9:46 pm
I love my American neighbours to the south but what the hell is this? This kind of crap would not happen on a bonafide Canadian company Web site. I got tagged through Allegiant Air. And I blame Allegian Air!! Cancelled my credit card immediately though. Man, it’s stil the wild west down there LOL!
2/6/09 12:28 pm
If I read correctly:
“We want to make it easier for customers,” he says.
BUT: (he goes on….thanks to companies like his)
“People should pay attention and not just click through offers on their screens.”
2/12/09 10:07 am
I too ordered flowers from FTD. LUCKLY I happened to also check my Bank Cards Statement on the same day; only to find the ‘pending’Complete Savings/ Web Loyality charge.
When FTD was contacted they agreed they are ‘partners’ with Web Lolality. Oh., if you have a PROBLEM you have to contact Web Loyality direct! F.T.D. can’t help you.
I have contacted my States Attny. General as well as the BBB with Complaints about this F Rated Company’s actions!
2/13/09 11:55 am
I used the Fandango website for tickets in Nov 08, this week while looking over my DiscCard I noticed charges for SHOPPERDISCOUNT. COM 800-889-8776 CT and RESERVATIONREWARDS.COM 800-732-7031 CT at $12.00 each per month. When I called, they were very NICE and accommodating offering to credit all the charges for the 4 months without and fight what so ever!… It was “To Easy” as they say. I think they know they scam you and bill your CCs and if caught… rollover so you don’t file a complaint. My advise, get your tickets at the theater… you can get tickets at most places days in advance…. and Check you CC statements for past charges!
2/14/09 12:26 am
Seeing as I usually spot scams like this because they ask for personal information, and I was under the assumption that giving out personal information to third parties was illegal, I just threw my email address at them expecting the free 10 dollars for my next purchase at EBGames.
This is incredibly dishonest and they’re basically stealing our money. If this lawsuit is still going on I’d love to be a part of it, just tell me where to sign up.
I’m not usually one who supports any type of class action lawsuit, but this deserves action.
2/18/09 4:36 pm
I want to be included in the class action lawsuit against PriceLine !!!
How do I do this?
I just found that I have been charged from the third party company for 11.99$ a month for almost a year.
2/27/09 9:28 am
wss07@yahoo.com
Contact me about the class action lawsuit, Priceline.com charged my Visa debit card with an unauthorized amount.
3/4/09 11:44 am
Please add me to this class action suit. It seems that every time I order something on-line or via phone, I get signed up for various shopper discount clubs. I am 81 years old and on a very fixed low income and the convenience of shopping online or via phone no longer is convenient when I have to expend so much time and energy trying to get the charges reversed and membership cancelled. I hope more class action suits happen. I also got charged for “Homeplay” and “budget Savers Mnth” $19.95 each. The others were “Reservation Rewards” and Shopper Discounts”. My daughter had the same problem Holly.Stallings@comcast.net. Add her too, please.
3/5/09 10:06 am
Just got an email announcing this suit. I assume that means that somewhere either I or my wife fell into this thing.
Came here to check the validity of it. Guess it’s real…..why not be included, eh?
3/6/09 1:56 pm
Interesting that none of the people admit that they did NOT read the ageement they received with the $10 dollar offer. Hope they don’t buy cars the same way
3/10/09 7:49 pm
I would like to join this lawsuit they have done this to me for close to 2 years.
3/16/09 11:04 am
Does anyone know whether or not “yoursavingsclub” is part of this suit?
It appears I was signed up for this at the same time as Reservation Rewards. Granted “yoursavingsclub” is only charging $1.00/month compared to Reservation Rewards’ charge of $10.00/month. But still, any amount lost is unbelieveble and should be accounted for.
3/17/09 2:55 pm
I just received the email today letting me know about the lawsuit coming this summer in June against webloyalty. However, I don’t know what “program(s)” I was enrolled in. How can I find that out?
3/19/09 1:44 pm
Been getting scammed since July 08 for $12 per month…trying to get reimbursed now but it isn’t easy.
3/31/09 1:29 pm
This has been happening for a very longtime now, yet nothing in terms of getting the lawsuit dealt with, what does the American justice system need before following through on these things?? Honestly, it’s disgusting!
4/19/09 9:45 pm
I cancelled my membership since March 2007, didn’t even use it what so ever, during that time was my Chase Visa, now they are deducting through my checking, how do they did that without me authorizing it. Kind of scary….
5/3/09 5:10 pm
They are still at it.
Any update on the lawsuit?
I was a repeat customer of Buy.Com but I am glad to announce that this is the last time I will ever buy anything from Buy.com. I will advice everyone to thing twice about using the site or try to redeem any rewards program from them.
Why?
I bought a Digital Camera Canon PowerShot A590 IS 8 from Buy.com. Everything was excellent; transaction, shipping, product, etc. One month later I see a fraudulent charge on my credit card bill, apparently from Shopper Discount and Rewards. I dispute and follow through and it comes out that in trying to get a promised $10 coupon off for my next purchase, I have signed up for membership of Shopper Discount and Rewards. To the best of my knowledge I never did sign up for Shopper Discount and Rewards. I also halted the sign up process as soon as I realized that I have to enroll in something to get the rewards. Meanwhile, there was no mention of a monthly recurring fee. There was no terms of service (TOS) or anything I had to signal agreement. Just the initial step of entering my email and boom I am in. I did not complete the sign up and hence did not receive any discounts or coupons from them.
I also did not give Shopper Discount and Rewards my credit card and other information. Apparently Buy.com is working with Shopper Discount and Rewards or is in collusion with them. The Customer Rep at Shopper Discount and Rewards Stacy with Rep ID 61091 confirmed that my information was received from Buy.com. I did not and have not authorized Buy.com to share my personal information with Shopper Discount and Rewards. I now have serious doubts about the credibility of Buy.com and their respect for their customers.
6/6/09 3:11 am
Well…here one for you not only did they get me once but twice. When I overdrafted and went into the bank to find out what the___, I found these charges that was supposed to have cancelled. The customer servie number only rang. Thank God For US Bank–they also tried to get a hold of this company and could not and gave back 3 months worth of charges, and the overdraft fees that occurred from this scam. Well we thought we had this blocked. Not so…6 months later I was bank at the bank starting all over. We closed my account, cancelled by debit card and reopened everything. What a mess? These company’s CEOs were eating cavier off all our money,while the rest of us were fighting to pay our overdraft fees that paid for their rich taste.
7/11/09 10:31 am
I can believe this!! I just checked my bank account from where I used Orbitz.com to book a trip for spring break. I booked it in Feburary and ever since, $12 per month has been drafted from my account. That is clearly stealing. I hope they really get the pants sued off of them. You can’t just take someone’s credit card numbers and use them, if I were to do that at my job, I WOULD BE IN JAIL!!
7/18/09 9:58 pm
I bought airplane tickets from Orbitz.com and go sucked into this scam. Ripped off for 14 months at $12 per month!
8/6/09 6:46 pm
The class action suit against Reservation Rewards is a SCAM in itself. Only one class action suit can be filed at one time for any given company or situation. So, the company filed one against THEMSELVES to keep anyone else from making further claims. In the contract, it limits you to any further legal action, and will only return “up to 2 months worth of charges.” They will return 2 months worth of charges with a simple phone call. DO NOT sign up for the class action lawsuit. I was ripped off for over a year’s worth of charges. I went along with their little scheme, filled out all the mail-in paperwork they make you fill out, and I actually DID get my money back. The lawsuit WILL NOT return any more than 2 months worth of fees. Keep that in mind.
8/11/09 10:19 am
I purchased tickets through Fandango in Janauary 2009, my visa card has been charged $12.00 for the past 7 months to “ReservationRewards”. I called they said I signed up for a free movie ticket offer whihc I never received. Very deceptive and misleading business practices. I’d have more respect for them if they used a mask and gun to hold me up. I can only imagine how many people are being robbed by these creeps and don’t even know it. I hope somebody takes some sort of action against these guys.
8/11/09 3:28 pm
SUPERSHUTTLE scammed me with this illegal action. I spoke with the General Manager at Supershuttle and she was very evasive. They share MY money. I wrote the CT Attoney General without results – guess they get a cut also.
I hope this website (XECONOMY) does not scam my email address.
Richard
8/27/09 9:09 pm
Hello Xconomy readers:
There is an update and resolution of sorts to this whole Webloyalty story now. A federal judge approved the settlement agreement in the class-action suit, and it went into effect this month. Consumers who belonged to any of Webloyalty’s discount programs between 2000 and 2008 are eligible for partial and in some cases full refunds for each program in which they were enrolled. And Webloyalty has agreed to a number of changes in the way it pitches its discount program.s See this new August 27, 2009 Xconomy story for all the details.
10/28/09 7:06 pm
Yet even after a suit they do the same thing! I was never offered any coupons or to sign up for any reward..I just find 12 bucks charged to my back account that made another check that would have cleared bounced…so this 12 bucks wound up costing me 82!!!!!..this law suit needs to be opened back up because apparently this company made enough to not even be bothered by the first!