NEW YORK—State Attorney General Andrew Cuomo announced on Wednesday that 22 online businesses that allegedly link unsuspecting people to fee-based memberships will be investigated by his office.
High-profile companies like Staples.com, and Buy.com use discount programs Webloyalty, Affinion/Trilegiant, and Vertrue. Cuomo's office subpoenaed companies that use those three programs, seeking information on whether the retailers share customers' information with the discount programs, according to a press statement from the attorney general.
Cuomo said, “Well-known companies are tricking customers into accepting offers from third party vendors, which then siphon money from consumers’ accounts.”
Cuomo said that the terms of agreement for the membership programs are often obfuscated in small print. One example that Cuomo highlighted was that an existing customer at an online retail site may click on a link and automatically give their credit card information to the discount program.
The attorney general said he levied the subpoena against the companies because he had received many complaints from New Yorkers, saying they were duped by such practices. Customers say they were having difficulty canceling their memberships and getting refunds for the “unauthorized charges,” said Cuomo's release.
One company, Fandango.com, an online movie ticket retailer, agreed to the attorney general's terms and stopped using a discount program, a decision Cuomo lauded.
Barnes & Noble, one of the companies targeted in the subpoena, released a statement on Wednesday which said they do “not and have not shared customer debit or credit card information with these outside companies. We seek to protect our customers from these type of practices.”
Via a Reuters article, Vertrue agreed to Cuomo's terms, saying, "The company will no longer conduct 'datapass' marketing on the Internet and has already begun to work with its marketing partners to effectuate this change as soon as possible.”
Other companies that were subpoenaed by Cuomo include Ticketmaster.com, MovieTickets.com, FTD.com, Shutterfly.com, 1-800Flowers.com, Avon.com, Budget, Staples.com, Priceline.com, GMAC Mortgage, Classmates.com, Travelocity, Vistaprint, Intelius, Hotwire.com, Expedia/Hotels.com, Columbia House, Vertrue, Pizza Hut, and Gamestop/EB Games.