Webloyalty.com sued
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carol
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If is sounds too good to be true it probably is true. which is what I said to my FTD rep and someone else at hdqtrs.. which is why I stated emphatically that I wanted no part and not have my customers subjected to this scheme.
I am very disappointed :soapbox: that FTD was too stupid?? naive?? or just plain greedy to see this coming and by joining in they have subjected all of us to very bad PR and suspicion..
I am very disappointed :soapbox: that FTD was too stupid?? naive?? or just plain greedy to see this coming and by joining in they have subjected all of us to very bad PR and suspicion..
Story without link
Suit says online marketer ran scam
Shoppers allegedly tricked into paying fee
By Sacha Pfeiffer, Globe Staff | September 12, 2006
Customers of several popular online retailers, including Fandango.com, Priceline.com, and Staples.com, were victims of an alleged Internet scheme in which their credit cards were charged a monthly fee for a ``discount club" membership they had never requested, according to a class action lawsuit filed yesterday in US District Court in Massachusetts.
The lawsuit accuses Webloyalty.com, an online marketing services company in Norwalk, Conn., of engaging in a ``coupon click fraud" scam in which credit card information was transferred to Webloyalty by its dozens of online partners -- such as Movietickets.com, Petco.com, and FTD.com -- without consumers' consent.
``These are huge retailers, and they are complicit in the scheme," said Boca Raton, Fla., lawyer Stuart A. Davidson, whose San Diego law firm, Lerach Coughlin, filed the lawsuit. ``They are reaping a percentage of the money that Webloyalty is stealing from the nation's consumers."
Webloyalty, which is accused of violating consumers' privacy rights and engaging in deceptive business practices that have netted the company huge fees, denied any wrongdoing.
``The allegations are completely without merit, and the lawsuit misrepresents the manner in which we conduct business," said Rick Fernandes, Webloyalty's chief executive. ``It's chock full of inaccuracies, and we intend to win the case and collect our attorney fees in the process."
Fernandes declined to detail those alleged misrepresentations or inaccuracies, saying, ``I'd rather not talk about that at this time."
Los Angeles-based Fandango, a codefendant in the case, did not return a call for comment.
The alleged scheme worked this way, according to the suit: After consumers made online purchases from various Web retailers, a pop-up window appeared on their computer screens promising a $10 coupon on their next purchase. If consumers entered their e-mail addresses to redeem that coupon, their personal information, including credit or debit card number, was automatically transferred to Webloyalty.
Webloyalty then automatically billed the consumer's credit or debit card a $9 or $10 monthly fee for a membership in its ``Reservations Rewards" discount club.
If consumers did not cancel the membership by contacting Webloyalty within 30 days, they were charged a recurring monthly fee.
E-mails notifying consumers of the cancellation policy were typically disregarded by consumers as spam, or automatically screened out as spam by e-mail systems, according to the suit.
Furthermore, the Reservations Rewards program offered no benefit to consumers, according to the suit; instead, Webloyalty kept the monthly fees and paid its Web retailer clients a ``per-customer" fee for each consumer who "signed up" for the club.
``In our mind, this company was run just like a securities fraud boiler room, and just like those companies they earned millions of dollars off the backs of consumers," said Davidson, who added that ``tens or hundreds of thousands" of consumers have been victims of the alleged scheme.
Webloyalty's roughly 75 e-commerce business partners also include or have included LaneBryantcatalog.com, LillianVernon.com, AmericanGreetings.com, Tiger Direct.com, EBGames.com, classmates.com, AllPosters.com, JoAnn.com, uBid.com, and 123inkjets.com.
Sacha Pfeiffer can be reached at [email protected].
© Copyright 2006 Globe Newspaper Company
Suit says online marketer ran scam
Shoppers allegedly tricked into paying fee
By Sacha Pfeiffer, Globe Staff | September 12, 2006
Customers of several popular online retailers, including Fandango.com, Priceline.com, and Staples.com, were victims of an alleged Internet scheme in which their credit cards were charged a monthly fee for a ``discount club" membership they had never requested, according to a class action lawsuit filed yesterday in US District Court in Massachusetts.
The lawsuit accuses Webloyalty.com, an online marketing services company in Norwalk, Conn., of engaging in a ``coupon click fraud" scam in which credit card information was transferred to Webloyalty by its dozens of online partners -- such as Movietickets.com, Petco.com, and FTD.com -- without consumers' consent.
``These are huge retailers, and they are complicit in the scheme," said Boca Raton, Fla., lawyer Stuart A. Davidson, whose San Diego law firm, Lerach Coughlin, filed the lawsuit. ``They are reaping a percentage of the money that Webloyalty is stealing from the nation's consumers."
Webloyalty, which is accused of violating consumers' privacy rights and engaging in deceptive business practices that have netted the company huge fees, denied any wrongdoing.
``The allegations are completely without merit, and the lawsuit misrepresents the manner in which we conduct business," said Rick Fernandes, Webloyalty's chief executive. ``It's chock full of inaccuracies, and we intend to win the case and collect our attorney fees in the process."
Fernandes declined to detail those alleged misrepresentations or inaccuracies, saying, ``I'd rather not talk about that at this time."
Los Angeles-based Fandango, a codefendant in the case, did not return a call for comment.
The alleged scheme worked this way, according to the suit: After consumers made online purchases from various Web retailers, a pop-up window appeared on their computer screens promising a $10 coupon on their next purchase. If consumers entered their e-mail addresses to redeem that coupon, their personal information, including credit or debit card number, was automatically transferred to Webloyalty.
Webloyalty then automatically billed the consumer's credit or debit card a $9 or $10 monthly fee for a membership in its ``Reservations Rewards" discount club.
If consumers did not cancel the membership by contacting Webloyalty within 30 days, they were charged a recurring monthly fee.
E-mails notifying consumers of the cancellation policy were typically disregarded by consumers as spam, or automatically screened out as spam by e-mail systems, according to the suit.
Furthermore, the Reservations Rewards program offered no benefit to consumers, according to the suit; instead, Webloyalty kept the monthly fees and paid its Web retailer clients a ``per-customer" fee for each consumer who "signed up" for the club.
``In our mind, this company was run just like a securities fraud boiler room, and just like those companies they earned millions of dollars off the backs of consumers," said Davidson, who added that ``tens or hundreds of thousands" of consumers have been victims of the alleged scheme.
Webloyalty's roughly 75 e-commerce business partners also include or have included LaneBryantcatalog.com, LillianVernon.com, AmericanGreetings.com, Tiger Direct.com, EBGames.com, classmates.com, AllPosters.com, JoAnn.com, uBid.com, and 123inkjets.com.
Sacha Pfeiffer can be reached at [email protected].
© Copyright 2006 Globe Newspaper Company
PhillyPhlorist
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Totally agree, Carol. FTD should have stayed FAR away from this company. It seemed to me from the beginning like a scam to hound the customer for busines via click-offers. etc.....at our expense.
- H.
Edit: I would say greed was the reason...
12BucksFor2Dozon
New Member
FTD is neither stupid or naive, but are INCREADIABLY greedy, and the corporate bean-counters will stop at NOTHING to improve the bottom line and secure their yearly bonuses.
Lerach Coughlin has a illustrious history of winning class action suits. Webloyalty.com is in for a real fight.
BOSS
FlowerChat Administrator
Sorry Folks.,... but I have to agree with mark on this one...FTD knew going in what they were doing....warning bells went off a long time ago...
FTD is in good company, though ... holy cow, look at the list of other partners! Smells, walks and quacks ...
Ryan
Ryan
From today's New York Times:
Online Shopper
Who Charged This? You, That’s Who.
Published: April 19, 2007
WE all have coping rituals. Mine kick in when it’s time to pay bills.
Before opening a credit card statement, I promise myself that I will not succumb to recrimination and self-loathing when forced to confront my spending habits.
This is a hollow promise. Typically, my statements list so many troubling purchases — everything from $87.15 for midweek Chinese food delivery to the $70.17 that Otto’s veterinarian charged for dog blood work — that I resort to Plan B: avoid scrutinizing any single item closely.
This is a big mistake. The other day, as I was trying to avoid making eye contact with $168.09 (jeans and a T-shirt) and $40.24 (how can a tank of gas cost that much?), I happened to notice a mysterious $10 charge.
It was for WLI*RESERVATIONREWARDS.CO.
It didn’t ring a bell. Was Reservation Rewards a surcharge for a hotel room? A magazine subscription? Or a digital audio download?
I phoned the toll-free number. A customer service representative told me that my husband had enrolled in a subscription service that offered members discount coupons for travel and restaurants. The cost was $10 a month.
That didn’t sound like my husband.
“Maybe when he bought something else,” the customer service representative said. “Like on Fandango.”
Ah, the movie ticket site. This time a bell did go off — a warning bell.
I could picture my husband buying tickets online. I could imagine one of those annoying direct-marketing offers popping up. I could even picture him clicking on it. But I couldn’t see him entering a credit card to subscribe.
It turned out he didn’t have to. Tempted by a $10 cash-back award offer (“Good for your next Fandango purchase!”), he had typed in his e-mail address.
Unfortunately, he skipped over the fine print: “By entering my e-mail address as my electronic signature and clicking yes, I authorize Fandango to securely transfer my name, address and credit or debit card information to Reservation Rewards for billing and benefit processing.”
“Cancel it,” I said to the representative.
“I’ll also refund the $10 charge,” she said.
The next day, it got worse. That was when my husband received an e-mail message telling him that he had been a Reservation Rewards member since November 2005.
He phoned from his office to read the message: “We have issued a refund of $160.”
“They charged us $160?” I asked. “You were a member for 16 months?”
“I’ll never buy tickets at Fandango again,” he said.
That was one possible strategy. But it could really limit his travels online, since he’d have to avoid dozens of other companies — including Petco, Lane Bryant, FTD and Classmates.com — that work with the parent company of Reservation Rewards, Webloyalty. “You’re missing the point,” I said. “Somehow I failed to notice a $10 charge that showed up on the credit card statement for 16 months in a row. How?”
Shaken, I went straight to the people at Webloyalty to ask them to reveal the sneaky marketers’ tactics they used to dupe suckers like my husband and me.
But first I checked my credit card statement to make sure I wasn’t a member of any of Webloyalty’s other programs, which include Shopper Discounts and Rewards, Travel Values Plus, Wallet Shield and Buyer Assurance.
Beth Kitchener, a spokeswoman for Webloyalty, said I had it all wrong.
“The next thing you are probably going to do is Google us, so I will tell you we are right now involved in a class-action suit,” she said. “But there are two sides to every story.”
She added: “We have about 2 million members who use the service and enjoy the service. There are people who do sign up accidentally, but the process is very clear that if you do, you get a refund if you request a refund.”
She had a point. We received a refund.
Ms. Kitchener determined that my husband had received 11 e-mail messages over 16 months reminding him of his membership.
“Take a look and I will get hold of my C.E.O., Rick Fernandes, and we can call back,” Ms. Kitchener said.
The evidence was convincing. But I was certain that my husband had never seen any of the 11 e-mail messages. Perhaps they were deliberately designed to look like spam?
Mr. Fernandes said it was not the company’s goal to trick people into paying for a service they did not want.
If so, I asked, why market like this, instead of asking subscribers to enter a credit card number so they know that they’re buying something?
Mr. Fernandes said the idea was to make it easier for people to subscribe. “Otherwise they’re asking us ‘Why are you asking me to do this again, I just put my credit card in 30 seconds ago,’ ” Mr. Fernandes said. It sounded logical.
Then he urged me to buy something from one of Webloyalty’s online partners — like Fandango.com or FTD.com — to trigger the Reservation Rewards pop-up offer so I could judge for myself if it was clear.
That sounded reasonable.
He also suggested that I sign up for Reservation Rewards. “You get 30 days for free,” he said.
I hung up, thinking maybe I would.
Wait! Sign up again? I’m a sap.
To find out if I am more susceptible to marketing pitches than the average shopper, I phoned Mohan Sawhney, a professor at the Kellogg School of Management at Northwestern University who studies online consumer behavior.
“No, you aren’t,” Professor Sawhney said. When people shop online, he said, “they get trigger happy because it has become so easy to kind of point, click and pay.”
Direct-marketing pitches that take advantage of this predilection are only the latest variation on a theme that has thrived for years offline.
“It’s a time-honored tradition to nickel-and-dime customers and make money on fees,” Professor Sawhney said. He cited Blockbuster, which used to generate significant revenue from late fees. “Similarly, banks. They collect tens of billions of dollars in late fees and A.T.M. charges.”
But how did I ignore the evidence for 16 months?
“We tune out promotional messages, or even if we are aware at some level, there is inertia,” Professor Sawhney said. “Remember Columbia House? It was the same phenomenon, right? It was amazing how long they would keep sending those unwanted CDs.”
The solution?
“Ignore all pop-ups,” Professor Sawhney said. “And be vigilant when the statements come. All it takes is getting on the phone and canceling.”
E-mail: [email protected]
BOSS
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BOSS
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