By Gautham Nagesh - 05/19/10 06:49 PM EDT
A new bipartisan bill from Sen. Jay Rockefeller would ban online sales companies from enrolling consumers in services without their consent.
The West Virginia Democrat on Wednesday introduced the Restore Online Shoppers' Confidence Act following a year-long investigation by the Senate Commerce Committee. According to a committee aide, the aim of the bill is to protect consumers from deceptive Internet sales practices that charge for membership clubs and services they do not want and were unaware they purchased.
The committee's investigation found that three companies in particular made use of these tactics: Affinion, Vertrue and Webloyalty. Together the firms were able to scam Americans out of more than one billion dollars.
“Tricking consumers into buying goods and services they do not want is completely unacceptable. It’s not ethical, it’s not right, and it is not the way business should be done in America," Rockefeller said. "The bill I’m introducing today will ban these deceptive online sales practices once and for all.”
The aide said the companies fooled millions of Americans by partnering with legitimate websites that were willing to share their customers’ billing information, including credit and debit card numbers, for financial gain. When consumers called asking for refunds, the firms employed a number of tactics to stall or minimize the amount refunded unless the customer used one of the "magic words," including "attorney general" or "Better Business Bureau".
Senators Mark Pryor (D-Ark.), Bill Nelson (D-Fla.), Amy Klobuchar (D-Minn.), Claire McCaskill (D-Mo.) and George LeMieux (R-Fla.) co-sponsored the bill, which would require companies to clearly disclose the terms of their offers to consumers and to obtain a customer's billing information directly from the customer. The bill would also ban online retailers from transferring a customer's billing information, including their credit and debit card numbers, to a third-party retailer.