The report, entitled "Aggressive Sales Tactics on the Internet and Their Impact on American Consumers," found that three companies — Affinion, Vertrue and Webloyalty, exploit consumers' expectations about online shopping to trick them into joining their loyalty-based membership programs.
This deception has reportedly earned the companies and their 450 partner websites more than $1.4 billion in revenue, with the partner websites receiving a 50/50 revenue share. Eighty-eight partner companies were identified as having made more than $1 million in the deal, including Classmates.com, which reportedly earned more than $70 million from the scheme.
"Consumers often do not know these companies have their credit card numbers until they start seeing charges on their bank statements," the investigative report says, adding that there have been more than 30 million consumers enrolled in these clubs, with several million people unknowingly participating at any given time.
"After six months, this Committee has found that the companies we are investigating have figured out very clever ways to manipulate consumers' buying habits so they can make a quick buck. American consumers have been complaining for years about these misleading practices and asking for answers — and rightly so," Chairman Rockefeller said. "Millions of Americans are getting hit with these mystery charges every month — we have to do all we can to protect the hard working families relying on us to look out for their wallets and well-being."
The investigation concluded that almost no one receives the "cash back award" that Affinion, Vertrue and Webloyalty offer to online consumers at the time of enrollment, with some sources citing the rate at three percent.