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Leading e-tailers Accused of Making Huge Profits By Duping Web Users

In a U.S senate hearing on Tuesday, e-marketing companies were accused of conning customers into paying monthly fees to join online loyalty programs. Web shoppers in the US have complained for years about being inducted into a Web loyalty program without their knowledge or consent and were charged fees until they discovered the problem.

In the hearing it was said that companies like Webloyalty, Affinion, and Vertrue have apparently tricked customers in to filling in their email address in a web-ad from e-tailors like Orbitz, Priceline.com, Buy.com, Fandango, and Classmates.com, by promising them cash back or discounts. But when the ad was looked at closely, a notification was found which said that by entering their e-mail address, the shopper is agreeing to join a loyalty program and allowing the store to authorize marketers to charge their card each month, between $9 and $12.

U.S. Senate Committee on Commerce, Science and Transportation, which called the meeting, said that marketing companies like Vertrue, Webloyalty, and Affinion had generated more that $1.3 billion by “misleading” Web shoppers. The members of the committee also criticized e-tailors for selling private customer data to the marketers for a sum of $792 million. The committee had launched a 6 month long investigation after taking into account the complaints from people who had found unexplained charges on their credit card bill.

It is important to note that the government investigation will go on and that CEOs of Webloyalty, Affinion, and Vertrue are likely to be called to testify at another hearing, dated for next year.

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at ITProPortal.com where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.