Barely Legal Scams A Menace For Online Shoppers This Holidays

As the holidays get nearer, more and more Americans are going to be looking for convenient and reliable ways to do their shopping. An option getting more and more popular among American consumers is shopping online.

According to Forrester Research, American consumers are projected to spend around $45 billion during the holiday season this year. That is an increase of 8% from last year’s figures. The numbers are impressive and worrying as well. Shopping online, while it can be quite convenient, also has its inherent risks. Online scams are just about impossible to avoid these days.

One of the most serious problem facing online shoppers these days are those pop up advertisements that promise online shoppers cash back rewards if they click the “yes” button after they have finished an online transaction using their debit or credit cards. Experts say that these offers pose a serious threat to online shoppers.

When a shopper clicks one of these buttons, what really happens is that they are actually agreeing to a subscription service which charges them around $20 every month. Oftentimes, these subscriptions can go on for months before a card holder actually finds out about them. The threat is quite serious even though many would say that the majority of online shoppers are smart enough not to click the “yes” button. The Senate Commerce Committee recently held hearings regarding the issue and, according to its report, $1.4 billion in profits were shared over the years by Affinion, Vertrue and Webloyalty – the main companies offering this service – with their major e-commerce partners.

Committee Chairman John 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 report also stated that consumers enrolled in these membership clubs number at 30 million. These membership clubs, although saying that they offer promotions on products and services but few if any of their members actually get any cash back awards. The three major companies, Affinion, Vertrue and Webloyalty, also partners with 450 or more e-commerce websites and retailers and they divide the fees 50-50 to allow these companies access to the payment information of their customers. This gives Affinion, Vertrue and Webloyalty easy access to the credit card or debit card accounts of consumers and charge them with fees.

Although these tactics seem very questionable, they are not quite illegal. Consumer advocates are therefore warning consumers, especially those who shop online, to avoid these kinds of scams to save themselves any unnecessary holiday headaches and money.