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Big Retailers Took $792 Million for Sharing Credit Card Numbers

Trusted Big Brands May See Trust Plummet

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A U.S. Senate report has revealed that retailers (a number of which you may already know and trust), have accepted as much as $792 million to share customers’ credit-card information with direct marketing companies. Could your card number have been one that was shared? Would you have known?

The companies engaging in such practices have been getting away with it because of terms buried in fine print, where customers accept offers without having to share their credit card info themselves, placing a certain level of trust in the retailers that are profiting off of sharing their info.

The executive summary of the Senate document reads as follows:

In May 2009, Chairman Rockefeller launched an investigation into a set of controversial e-commerce business practices that have generated high volumes of consumer complaints. Since that time, Commerce Committee staff has been investigating three Connecticut-based direct marketing companies – Affinion, Vertrue, and Webloyalty – as well as the hundreds of online websites and retailers that partner with these three companies to sell club memberships to online shoppers. Although this investigation is not yet complete, it is clear at this point that these three companies use highly aggressive sales tactics to charge millions of American consumers for services the consumers do not want and do not understand they have purchased.

Chances are, you’ve encountered the "offers" that utilize this strategy. TechCrunch provides a sample screenshot:

Reservation Rewards

So who are the companies that have been selling credit card information? Well, the following were paid over $10 million each to do so:

- 1-800-Flowers.com
- Buy.com
- Classmates.com
- Columbia House
- Confi-Check
- Expedia/Hotels.com
- Fandango
- FTD
- Hotwire
- InQ
- Intellius
- MovieTickets.com
- Orbitz
- Priceline
- Redcats USA
- Shutterfly
- Travelocity
- US Airways
- VistaPrint

Dozens more were paid between $1 and $10 Million. I won’t name all of them (there is a full list here), but Yahoo is one of them. So is Avon, Barnes & Noble, eHarmony, Half.com, Pizza Hut, TimeLife, and Victoria’s Secret.

People have often expressed concerns about buying stuff online from brands that they haven’t heard of. It turns out that some of the biggest brands are not exactly as trustworthy as some may have thought. Customers are not pleased.

For the offending brands themselves, this has to be a PR and online reputation management nightmare. Read the whole report here (pdf) if you’ve got some time on your hands.

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Big Retailers Took $792 Million for Sharing Credit Card Numbers
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  • http://www.laokay.com Adsense Publisher

    I think this just goes to show you that it’s becoming more and more evident that somebody should just pay the consumer for their own data. It’s not really going to stop the data sharing, just that each time we’re finding a new scheme pops up.

    What if people were sent surveys each month and advertisements, and paid like $100 a month to take the survey, rate the ads, etc., and give out whatever personal information they feel ok with?

    Plus if the ads are coupons, and the person is interested, they can use them to save money.

    This way, companies are getting a better profile on you, so they know how to better market for your interests and needs, plus they’ll get a better picture on what discounts get you to buy, and which ones do not.

    I mean does Carl’s Jr know that every time they send me coupons I go to Carl’s Jr.
    Or that the most effective way to market a brand new hamburger to me is simply a buy-1-get-1-free offer? I always will try a new burger if they’re giving me a free one.

    Companies spend millions of dollars on consumer research, and it’s my belief that you go to the horses mouth if you want a good look at his teeth.

    Now, many companies are using these $1,000 weekly giveaways on the back of your receipts, but I think the better offer would be something like $5 off your next purchase, or a free something on your next visit. Cash is nice, but let’s actually pay everybody something for taking the time to do a survey, not just the lucky winner of a contest.

    Also how about these survey machines being at the restaurants themselves? By the time I’ve driven home, I’m pissed off at 2 slow cars, one almost collision with somebody not paying attention, 5 lights that go red as if they knew I was coming, and I’ve forgotten all about calling some number or going to a website, and oh darn, there is ketchup all over the receipt. Sorry can’t read it. Better luck next time.

    Now if it were in the restaurant, I’d take the 5 minutes to touchscreen my responses and get my discount coupon printed out, that’s got an offer I picked from what was available, and they figure I might like based on my survey.

  • Guest

    I got a similar screen shot to this blog post from Pizza Hut. Thinking I had a discount coupon, pretty normal for PH, I signed up. Then I find out that I’ve scammed by an ambiguous offer to *subscribe* to a discount service.

    Pizza Hut shared my Credit Card info with this 3rd party without my consent. My CC number is meant to be used for the transaction and nothing more. I cannot understand why Visa, MC, or AMEX allow this under their merchant agreements.

    I thank Web Pro News for raising this. Please continue pushing the case. Please email me directly if you’d like a petition signature.

  • Texmom

    The greed is what has given capitalism a bad name. I still believe in it, but in order for it to work, things like this must be exposed and harshly punished. We also need to get the government out of interfering with business and covering for their campaign contributors.