Webloyalty Customers Eligible for Payments Under Class-Action Settlement

8/27/09Follow @wroush

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the number of members who file an eligible claim,” Kitchener points out. “We cannot speculate on what that number will be at this time.” She says the company is notifying eligible customers about the settlement terms via e-mail, hard-copy letters, and advertisements in USA Today.

Meanwhile, Movietickets.com, Orbitz, Hotels.com, and many other consumer websites continue to display the company’s rebate offers, earning them what Webloyalty calls post-transaction revenues every time someone signs up. Because the class-action suit ended in a settlement rather than a legal ruling, it didn’t ultimately lead to a clarification in the laws governing this kind of online marketing, as some observers had hoped it might. However, Webloyalty did agree in the settlement to a number of changes in the way it pitches and administers its discount programs.

One of the changes relates to what was probably Webloyalty’s most controversial practice: getting shoppers’ credit card numbers from the merchants where they had just made purchases rather than asking them to provide credit card information explicitly during the signup process. Many consumers complained that because Webloyalty never asked for their credit card numbers directly, they didn’t realize they were signing up for anything. In the settlement, Webloyalty agreed to require users to manually enter the last four digits of their credit card numbers before joining a discount program.

How Webloyalty Is Changing Its Marketing Offers Under the Settlement AgreementOther changes in Webloyalty’s marketing as a result of the settlement include making billing details plainer when customers are signing up to receive rebates, making it easier for customers to cancel their subscriptions, providing toll-free customer service numbers in all e-mails, and ridding offer pages and advertisements of words like “award” and “reward” that suggested to some that the discount programs were free of charge. (See the graphic at left for a complete rundown of the changes Webloyalty is making to its offer pages. Click on the graphic to see a larger version or click here to see a full-size version.) Webloyalty will also pay $2.7 million in attorney’s fees to the lawyers in the class action case.

Meanwhile, separate from the class-action settlement, West Virginia Senator Jay Rockefeller, chair of the Senate Commerce Committee, is leading what he calls an “e-commerce ‘mystery charges’ investigation” into the practices of Webloyalty and other discount-program providers such as Vertrue, which is also based in Norwalk, CT. In May, the committee requested documents from the companies regarding what Rockefeller’s office calls “unauthorized charges,” and in late July it subpoenaed Vertrue after the company allegedly refused to provide relevant papers. (Vertrue says that it requested the subpoena, and that it would not hand over private customer data without one.)

“People in West Virginia and across the country are struggling more than ever to keep up with their mortgages, bills and other financial obligations,” Rockefeller said in a statement on the Vertrue subpoena. “If online consumers are being charged without their knowledge for services they don’t want, that is extremely troubling to me and has to be stopped at any time—but especially in the midst of this difficult economic climate.”

But Webloyalty, for its part, seems to be seeking lessons from the experience of the class-action suit. “We make every effort to be straightforward in our offers, allowing consumers to make educated choices regarding the products and services they purchase,” Kitchener tells Xconomy. “The Internet is a dynamic medium and, as Internet marketers, we must and do constantly evolve our approaches based on the input we receive from clients, members and other interested parties.”

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