Webloyalty Customers Eligible for Payments Under Class-Action Settlement

8/27/09Follow @wroush

Back in 2007, Xconomy ran a story by freelance contributor Seth Shulman about a class-action lawsuit unfolding against Norwalk, CT-based Webloyalty, an online marketing company. The comment section of that story became something of a clearinghouse for ongoing complaints against Webloyalty, which runs many of the discount programs pitched to consumers as they are finishing e-commerce transactions.

If you’ve ever bought a movie ticket online at Fandango or Movietickets.com and then been offered a $10 rebate, you might well have seen a Webloyalty offer. The problem—as scads of consumers alleged to Xconomy, the Connecticut Better Business Bureau, the New York Times, and other organizations—was that by accepting such rebate offers, many people unwittingly signed up for discount programs that carry a $10 monthly subscription price, fees that customers often didn’t notice on their credit card bills until months or years later.

Well, now there’s finally something for Webloyalty’s critics to be happy about. On June 30, a federal judge in Boston approved a settlement agreement in a class-action lawsuit alleging that Webloyalty broke state and federal laws by failing to disclose details such as the monthly charges. Webloyalty maintains that the details about its charges have always been clear in the fine print and in the follow-up e-mails it sends to subscribers, and it admitted no wrongdoing in the settlement. But under the terms of the settlement—which went into effect on August 14—the company agreed to change the way it markets its programs, and to partially or fully refund Webloyalty members for each program in which they were enrolled. (That includes programs known as Reservation Rewards, Shoppers Discounts & Rewards, Members Specials, Buyer Assurance, Distinctive Privileges, PC Protection Plus, Travel Values, Travel Values Plus, Classmates Rewards, and Wallet Shield.)

Up to 20 million people who joined Webloyalty’s programs between September 30, 2000, and September 30, 2008, will be eligible for the refunds, according to David George, a plaintiff’s attorney in the suit quoted in “The Haggler,” the New York Times’ consumer-protection column. If you’re one of these people, you can’t dally too long: members of the settlement class (meaning any U.S.-based Webloyalty subscriber who didn’t explicitly opt out of the settlement before May 29, 2009) must submit claim forms by January 11, 2010, to get their payments, according to this website created by Garden City Group, a Melville, NY, company that specializes in administering class-action settlements.

In comments to Xconomy, Beth Kitchener, Webloyalty’s vice president of corporate communications, said “we fully support the judge’s decision” to approve the settlement agreement. “Given that the settlement terms are consistent with our commitment to maintaining high standards in our marketing and customer service practices, we believed it to be in the best interests of our company, our clients and our members to resolve this matter and move forward,” Kitchener said.

It’s hard to gauge what material effect the settlement will ultimately have on Webloyalty. If all 20 million members of the settlement class were to apply for payments of $10 or $20, that could translate into a hit of $200 million to $400 million. But “the actual amount of payments is dependent on … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • http://www.myspace.com/rebecca_807 Rebecca Mills

    My husband, Michael, and I just discovered charges from “Reservation Rewards” on our online banking yesterday. The online banking did not provide a full telephone number for me to call in most listings of this charge, so I looked it up on the internet.

    When I called Reservation Rewards, I asked them how long they had been charging me. They informed me of six months of charges for a service that I wasn’t even aware of. I then asked them where they got my credit card number. They informed me it was from KingSizeDirect, where I had purchased school clothes for my son.

    I had been unwillingly charged by these people a few years ago, so I absolutely know that I did not agree to do any more business with them. I honestly feel that my credit card numbers were stolen. Please help us! We are still being defrauded by this establishment in 2010.

  • katie

    RR ALWAYS posts their number by their charge. A REAL scam company wouldnt. If the number wasnt listed was because of your online statement format!…This company does not steal your credit card! People who shop on the internet need to stop being so ignorant!! These offers are completely separate and take you to a whole other window. Its easy to click out, but when you enter the required information for the offer, of course you are going to be enrolled! Dont be so naive people, NOTHING IS FREE FOREVER!!!!..If it wasnt clear EVERY SINGLE INTERNET SHOPPER would enroll and thats so not the case.

  • Nadav

    These people are still in the business of fraud – or “almost fraud”. My wife went through the same thing a few months ago after buying movie tickets at Fandango.com . $12 per month every month, no billing statements, no nothing. You call them up – “cancel your account” is the first option on their IVR, with the cancellation done by IVR – which means that the system was rigged to begin with. negligible cost to acquire paying subscribers, with the full expectation that once they are on to you they will rather cancel the account then in 5 minutes, rather than spend hours trying to get a refund. 0 value, probably an average of $40-50 per person before they get on to the scam.

  • Pat Williams

    Shopper Discount has been charging me $12 per month for over 2 years.Unfortunately, I just discovered it. I NEVER authorized this membership. I NEVER apply for such things. My information was illegally taken from my purchase of an airline ticket in January of 2008. I called 7/28/2010 to end the charges and the illegal account. The rep said she would send me a form to apply for a refund. It never arrived. I called again today and again requested the form be e-mailed to me. It has not arrived after 5 hours.I asked if I could have my e-mail address repeated back to me to make sure it was correct. I was told by the rep that he could not make any changes to a canceled membership. I cannot find anywhere on the net the CEO address.I need this info to make state and federal complaints. Can you help with that info? Thanks.

  • Julie Donalek

    How do we obtain a list of all the companies that have contracts ith Webloyalty and other such paracytic companies so that we can first avoid them and second, put them all out of business.

  • darlene

    March 19,2011 and shopper Discount/Reservation Rewards is still scamming people.I was scammed through Drugstore.com I thought I was getting a voucher for a future purchase for Drugstore.com, instead I was signrd up for Shopper Discount without my knowing it. They stold $120 from my bank account. Go to Facebook, under:Stop Reservation Rewards from stealing your Money,there is a list of businesses that are associated with them