Posted: Tuesday, May 4 2010 at 06:00 am CT by Bob Sullivan
Shopping online became a little safer this weekend when Visa banned a long-standing practice that Sen. Jay Rockefeller had blasted as "deceptive," saying it triggered $1.4 billion in unauthorized charges on 30 million Americans' credit card bills.
The tale provides a good reminder of the importance of scouring your credit card bills every month.
Millions of consumers ended up paying monthly charges for useless travel clubs and similar services after shopping at popular Web sites like 1-800-Flowers.com, Buy.com, Classmates.com and around 450 other sites, staffers for Rockefeller, D-W. Va., concluded in a report issued last year.
Consumers who shopped at the sites were enticed to click on an advertisement that offered free shipping or a discount. In many cases, merely clicking on the link to find more information led to enrollment in a monthly service – even though there was not so much as a sign-up page or a place to enter a credit card number. Many consumers were surprised to find that their credit card numbers had been furnished to the third-party site without their permission -- a tactic called "data pass."
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At the link, a "sample" clickie is shown that says "Your purchase is complete. Click here to claim up to $10 back on this purchase." If you clicked (in the real world) you were automatically enrolled in a "plan" using the same credit card number used for the original purchase without additional indication that you had "subscribed" to another "purchase", without being asked to re-enter a credit card number or otherwise authorize anything, and without any option to cancel the "enrollment."
Note that while Visa has issued a new "policy" to prohibit use of this method by sellers accepting their card, other credit cards are free to continue to permit it. Vague mumblings by a couple of other Cards are reported; and it's uncertain whether Visa really can effectively prevent it's use by all seller sites.
A link to a PDF Senate report on the investigation of the scam is included in the article. The Senate report is 35 pages, but the link apparently is to a copy on the Red Tape Chronicles web site and did not respond to a "save" using either the button in the PDF or the browser button. You can print it, however (so I just printed-to-pdf the get it where I can read it all more conveniently).
Legislation to legally ban this "method" has been proposed and should (IMO) be passed; but of course that's still only a faint possibility.