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Web scam alert : Don’t shop online until you read this - By : Jeff Fox , Consumer

vendredi 4 décembre 2009 par William Toussaint

If you’re shopping online this holiday season, beware : The United States Senate Committee on Commerce, Science, and Transportation has just exposed a massive Web scam that has cost online shoppers more than $1.4 billion.

The revelation is all the more shocking because the con was carried out with the knowledge and support of hundreds of sites and online retailers, including some household names found in the Committee’s list shown to the right, who profited handsomely from it. According to a statement by Committee Chairman Senator John D. Rockefeller IV (D-WV), here’s how the scam worked :

After shoppers made online purchases and were going through sites’ usual “check out” process, three Internet companies tricked them into signing up for what Sen. Rockefeller termed “useless membership clubs” with names like Reservation Rewards or ValueMax Shopping Service. (Such clubs can charge an unwitting member’s credit card $10 to $20 per month.)

According to the committee’s 30-page investigative report [PDF], during check out, consumers are shown offers promising cash back rewards that appear to be related to the transaction they are trying to complete. The committee’s investigators found that, “Misleading ‘Yes’ and ‘Continue’ buttons cause consumers to reasonably think they are completing the original transaction, rather than entering into a new, ongoing financial relationship with a membership club.”

Many victims don’t realize that once they enter personal information such as their e-mail address (but not their credit card number) to take advantage of the offer, the retailer at whose site they had just been shopping will automatically transfer their credit or debit card information to the membership club, which will charge them for its services.

“What I find most outrageous about these scams,” Sen. Rockefeller said at a Committee hearing on November 17, “are the reputable online businesses that have been willing to take part in these scams.”

According to the committee’s investigators, “Eighty-eight e-commerce companies have earned more than $1 million through using these tactics, including 19 that have made more than $10 million. has made more than $70 million using these controversial practices.”

The image at the top of this blog post shows the committee’s list of e-commerce companies that profited from the scam. The committee’s press office told me that by now some of these companies may have discontinued their relationship with the membership club mongers.

I visited the site soon after the Committee hearing and followed the procedures for opening a account far enough along to check out. The "$20 Cash Back" offer shown above (for a service called Privacy Matters 1-2-3) appeared. Note that it bears the logo on top, even though it’s an offer to join a membership club. Judge for yourself whether or not it is misleading.

Once I clicked that offer’s not-so-obvious “No Thanks” link, I was presented with a different offer (for a service called Family Safety Report) also bearing the logo on top. Again, you decide whether this service’s "Offer Details," shown to the right, are likely to be read and fully understood by the average person.

Bottom Line : When shopping at any online site this holiday season, be extra careful about tempting offers like these. Unless you truly want to subscribe to a membership service like Family Safety Report (which says it distributes reports and alerts about sex offenders ; a child ID kit ; and other merchandise, for $19.95 per month), don’t enter any personal information—not even your e-mail address. Instead, just click on the "No Thanks" link.

If you find such advertising objectionable, tell the retailer with whose site it’s associated. And don’t hesitate to report misleading advertising to the Better Business Bureau, your state’s Attorney General, or the Federal Trade Commission.

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