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Klobuchar and Commerce Committee Members Introduce Legislation to Ban Deceptive Online Sales Practices

Bill will eliminate underhanded tactics that charge consumers for services they were unaware they purchased

May 19, 2010

Washington, D.C. – U.S. Senator Amy Klobuchar (D-MN) has joined Senator John D. Rockefeller (D-WV) and fellow Commerce Committee members to introduce the Restore Online Shoppers’ Confidence Act and end the deceptive online sales tactics that have been the subject of a year-long Commerce Committee investigation.  The bill follows several Commerce Committee reports revealing that companies used aggressive sales tactics to enroll online consumers in costly services without their consent. 

 “As a former prosecutor and now as a Senator, I’ve always believed that our laws must keep up with our technology.  This bill is good for e-commerce because it will root out the ‘bad actors’ and create a level playing field where companies compete based on the quality of their products and services,” said Senator Klobuchar. 

The first committee report, released in November 2009, focused on three direct marketing companies – Affinion, Vertrue, and Webloyalty – which also do business under a number of other names.  The report exposed how Affinion, Vertue, and Webloyalty used a set of online sales tactics to charge millions of consumers for membership clubs and services the consumers did not want and were unaware they had purchased. The report found that these companies partnered with hundreds of legitimate websites that were willing to share their customers’ billing information, including credit and debit card numbers, for financial gain. Other reports detail a number a tricks and duplicitous practices used to prevent consumers from getting back the money they lost.     

The Restore Online Shoppers’ Confidence Act will help put an end to the deceptive online sales tactics uncovered by the Commerce Committee’s landmark E-commerce investigation. The bill is also sponsored by Senators Mark Pryor (D-AK), Bill Nelson (D-FL), Claire McCaskill (D-MO) and George LeMieux (R-FL).  The bill will protect online shoppers by:

• Prohibiting companies like Affinion, Vertrue, and Webloyalty from using misleading post-transaction advertisements by requiring them to clearly disclose the terms of the offers to consumers, and to obtain consumers’ billing information, including full credit or debit card numbers, directly from the consumers.

• Prohibiting Internet retailers and other commercial websites from transferring a consumer’s billing information, including credit and debit card numbers, to post-transaction third party sellers, like Affinion, Vertrue, and Webloyalty.

• Requiring companies that use “negative options” on the Internet to meet certain minimum disclosure and enrollment requirements, so consumers will not end up paying recurring fees for goods and services they did not intend to purchase.

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