UOMO INVESTIGATING 22 POPULAR ONLINE RETAILERS FOR LINKING CONSUMERS TO DISCOUNT CLUBS THAT CHARGE HIDDEN FEES

Cuomo forges groundbreaking agreement with Fandango to protect online shoppers from hidden charges; Company to permanently stop passing customers’ information to discount club sellers

NEW YORK, N.Y. (January 27, 2010) – Attorney General Andrew M. Cuomo today announced his office is investigating 22 popular online businesses that deceptively link unsuspecting consumers to fee-based membership programs that charge unauthorized fees under the guise of discount offers. His office has also reached an agreement with online movie ticket retailer Fandango to end similar practices.

Cuomo’s investigation has found that when consumers shop online from familiar retailers, they are often presented with a discount or cash-back incentive offer as they complete their purchase. When consumers click on the discount or incentive banner, they are unknowingly directed to a membership program seller’s Web page that is separate from the online retailer’s site. The consumer is then instructed through large, colorful print and voice prompts to accept the discount or incentive. Information about joining the membership program and its ramifications, including the fact that the consumer is agreeing to transfer his or her credit or debit card account information, is buried in fine print and cluttered text. Small and recurring charges then begin to appear on consumers’ credit or debit card bills from unfamiliar companies. Because of the low dollar amount, the charges may go unnoticed for some time.

“This online scheme has impacted the finances and tried the patience of tens of millions of consumers nationwide. Well-known companies are tricking customers into accepting offers from third party vendors, which then siphon money from consumers’ accounts,” said Attorney General Cuomo. “I commend Fandango for doing the right thing by ending the practice of sharing consumers’ financial information with these discount club sellers. I expect the other businesses to follow Fandango’s lead and adopt these reforms to protect consumers who shop online.”

Cuomo has sent subpoenas to 22 well-known merchants that have deals with the three major companies that offer these discount programs: Webloyalty, Affinion/Trilegiant and Vertrue. The subpoenas seek information about retailers’ practices of sharing consumers’ account information with membership program companies; their knowledge of any deceptive solicitations; and compensation from the membership companies. The merchants being investigated include: Barnes & Noble, Orbitz.com, Buy.com, Ticketmaster.com, MovieTickets.com, FTD.com, Shutterfly.com, 1-800Flowers.com, Avon.com, Budget, Staples.com, Priceline.com, GMAC Mortgage, Classmates.com, Travelocity, Vistaprint, Intelius, Hotwire.com, Expedia/Hotels.com, Columbia House, Pizza Hut and Gamestop/EB Games.

Membership program companies enter into highly lucrative deals with the retailers and banks, which bring in millions of dollars in revenue when their customers click on deceptive incentives or become unknowingly enrolled. The three program sellers being investigated bring in revenues of more than $1 billion per year, much of which is amassed through fraud.

The scheme also takes place via postal mail: membership program sellers mail checks to consumers accompanied by solicitations branded with the name of the business or bank with which the consumer has transacted. Consumers frequently do not realize that by cashing these checks, they are enrolling in a membership program with a monthly fee because the solicitations often create the false impression that consumers are being provided with the check as a rebate or reward for their past business. The fact that consumers are enrolling in a fee-based program for which they will incur monthly charges is only inconspicuously disclosed above the endorsement line on the check.

The Attorney General’s Office has received numerous complaints from New Yorkers who have incurred unauthorized charges under these circumstances. Many consumers have reported that the companies offering membership programs make it difficult for consumers to cancel memberships and obtain full refunds of the unauthorized charges. At least one membership program company tries to limit refunds to a single month’s charges, even if a consumer has been subjected to months’ or even years’ worth of unauthorized charges.

Recently, Attorney General Cuomo’s Office intervened in a class-action lawsuit against Webloyalty to ensure that a settlement included full refunds to eligible customers who were scammed. Prior to the Attorney General’s intervention, the settlement limited refunds to only two months.

As part of an agreement with Attorney General Cuomo’s Office, online movie ticket retailer Fandango has agreed to permanently end the practice of sharing customers’ credit and debit card information to discount program sellers. It will also implement reforms to protect online shoppers from being deceived by discount and cash-back advertisements that appear on the company’s Web site. Fandango will suspend contracts with any discount program sellers while it implements these changes, and the company will pay $400,000 into a consumer redress fund. Fandango will also adopt the following reforms:

• Review and approve all Fandango incentive offers made in connection with online purchases and require any contracted discount club seller to provide the numbers of New York customers enrolled and complaints received from those customers
• Explicitly warn consumers that the incentive is offered for joining a separate company’s membership club
• Explicitly notify consumers when they are redirected to a discount club seller’s site that they are leaving Fandango’s Web site
• Ensure that all cash-back or rebate offers made by contracted membership club sellers comply with New York state rebate laws by providing redemption forms and information at the time of the offer

Stacey Olliff, Senior Vice President for Legal and Business Affairs for Fandango said, “Fandango is pleased to play a leadership role with the New York Attorney General to promote responsible marketing practices for the e-commerce industry related to online membership programs. We share the desire of Attorney General Cuomo to ensure that all consumers, and in particular Fandango customers, are fully informed and supported in their evaluation of and enrollment in online membership programs.”

Senator John D. (Jay) Rockefeller IV, Chairman of the U.S. Senate Committee on Commerce, Science, and Transportation, said, “I applaud Attorney General Cuomo and his investigators for holding e-commerce companies accountable for their conduct. Tricking online shoppers into signing up for worthless membership clubs is not right, and it is not ethical. With my Committee’s investigation in Washington and Attorney General Cuomo’s settlement, I hope that this type of Internet scam will soon be a thing of the past. I am pleased that our efforts are improving the consumer shopping experience on the Internet, but there is more work to be done to combat the misleading tactics companies are using online – and I have every intention of making sure further changes are made moving forward.”

Claire Rosenzweig, President and CEO from the Better Business Bureau of Metro NY said, “We applaud Attorney General Cuomo’s proactive steps to protect consumers. We stand behind efforts that improve the consumer and business relationship through transparency and disclosure. Consumer protections on the Internet, where identity theft and fraud has dramatically increased over the past two decades are critical. Building trust in the marketplace is key and the Attorney General’s investigation into these programs is a move in the right direction and we look forward to continuing our partnership with his office.”

University of Minnesota Law Professor Prentiss Cox said, “Retailers that sell their customers’ account information so that the customer can be charged for a membership club by stealth should know that they are participating in a marketplace scam. Data from public enforcement actions over the last ten years and from the recent U.S. Senate Commerce Committee investigation suggest that the number of consumers who know they are club members and know they are paying for this purported privilege range between about 0 percent and 5 percent. Every retailer and bank should be held responsible for selling their customers’ account information to other companies, especially when the deceptive results of this arrangement are so obvious.”

Consumers can minimize the chances of being victimized by carefully reading the fine print in connection with any discount or service offers, particularly when shopping online. Consumers also should not cash any unsolicited checks that they receive in the mail without reading any fine print that appears on the front or back of the check, as well as any materials that accompany the check. The Attorney General urges consumers to carefully review credit and debit account statements each month. Consumers who discover unauthorized charges on a credit or debit card account are urged to contact the Attorney General’s Office at 1-800-771-7755 or visit www.ag.ny.gov.

The investigation is being handled by Assistant Attorney General Amy Schallop, Special Counsel Carolyn Fast, Assistant Attorneys General Jennifer Huber, Brian Montgomery and Harkiranjit Chahal of the Bureau of Consumer Frauds and Protection under the supervision of Bureau Chief Joy Feigenbaum.

Source:
http://www.ag.ny.gov/media_center/2010/jan/jan27a_10.html

A question that continues to pop into my head ever since a few years ago and even more so since this stimulus plan was put into effect.  It’s not really a question but a statement; why the stock market shouldn’t exist. You may be saying what on earth is this person talking about, keep reading and I will explain.

It all started when the markets around the world began to collapse a few years back in the year 2006 to 2007. Based on the events that outlined the collapse many stocks and companies plummeted to a record low numbers all based on consumer confidence. Consumer confidence drive stocks up. This means that if the media, the people and the spending of that company is good or acceptable than the stock price will remain average or greater. It is not based on profits, growth or other values.

If a media company wanted to they can simply dictate and promote a stock or a brand to a vast quantity of people and be able to get the stock price up. The reason that this is so important is because this stock system seems to rely on those factors rather.

Another problem with the stock market is shareholders. Companies always need to impress the shareholders. Companies are forced by shareholders to continue growing and making more profit eventually he will be a point in time when companies cannot continue to grow they will stop it is just impossible for these companies to continue growth. How is it impossible? It is impossible because there is only so many resources that the company can compete for and that is money and people eventually you’ll max out the people that are going to buy your product or services and that is how you will cap out the market.  This is how shareholders kill public companies.  A shareholder who hate the particular company or just outright as his own corporation even a private one can invest money into a company and sell at their own discretion at any point in time. Short selling is a prime example of how detrimental these acts can be.

In short if the stock market did not exist companies could no longer compete against themselves they will be able to focus more on their own and as a result will be more stable company. Shareholders bring many instabilities companies as they are always trying to make money on their investment which makes sense but in reality these people were trying to make money too fast. The market today is not stable and it has not been for the last 100+ years before.  I feel that if companies want  to become public they should not be burdened by what the shareholders have to say or what they want.

In less than 200 days the Obama administration has already figured out a plan to give the USA a new healthcare system when it takes years on end for a single product or even a service to come around.  Far to fast it seems.

Healthcare system and lines

Most people who pay taxes actually don’t pay taxes because they get tax breaks or get a refund.  Those people should not be elgibdle to vote for this sytem.  More than 15% of those people will be abusing the system anyways for drugs.

There are 1800 insurance companies there is no need for Goverment Health. No need for more spending no need for more crap.

Another major point is that NO DEMOCRATS have yet to be signed up on this new healthcare system.  Congress and the senators of which make it up have their own heatlchare system.  Yes, the won’t be on this plan.  Isn’t it wonderful how great this plan is when your own leaders are not on it.  Socialism people.  This is bad.  Until congress gets on the new healthcare system those of course who should be tyring it out as they are passing this crap, will not be on it.  Thus the american people are being corrupted by a congress and administration who is possibly connected the world largest corruption scheme ever.  Someone is playing their card quite well and a lot of people are soley being mislead.

People are saying how we should follow other countries, and this is never a good idea, as many mistakes can be made.  Canada’s healthcare is broke the people hate it.  Europe not only is it broke they have a terrible FDA like department that just doesnt care.

Today, President Barack Obama stated in a quick release that he will be granting Chrysler and GM to get more money on the already massive amount of money they have already given these failing companies.   The reason behind giving these companies more money is just outrageous.

These politicians and people giving out our tax payer money to help these companies out who are most likely not going to be in business much longer anyway are wasting our money.  I find it extremely disheartening that people are not facing the real facts.  Basing my research and information on the economy before and the present day I still feel that there is absolutely no reason to give money to these companies there is a clear reason why these companies are failing and don’t have money anymore.  It is because they make crappy cars.  My parents have had plenty of American made cars, at once they may have been good they surely haven’t kept up.  Our old car from the 1930s is running better than our old Ford Windstar ran for.  Within 3 years the speedometer broke, have you ever heard of speedometer breaking?

These companies I believe, have screwed themself over and I surely do not want to pay for their mistakes.  If you can’t make reliable cars we shouldn’t have to give you money to keep on making these cars at the low quality they are.  It is unfair.

Who is really to blame for the economic downturn?  Is it the banks?  The senator not paying his taxes?  Past President Bush?  Well I think we should start looking at the Credit Rating Agencies (CRA).

Let’s first explain what are Credit Rating Agencies (CRA), and what their responsibilities are so, that you (the people) are informed.

“A credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the services of the underlying debt are also given ratings. In most cases, the issuers of securities are companies, special purpose entities, state and local governments, non-profit organizations, or national governments issuing debt-like securities (i.e., bonds) that can be traded on a secondary market. A credit rating for an issuer takes into consideration the issuer’s credit worthiness (i.e., its ability to pay back a loan), and affects the interest rate applied to the particular security being issued. (In contrast to CRAs, a company that issues credit scores for individual credit-worthiness is generally called a credit bureau or consumer credit reporting agency.)” Source: Wkipedia

Note: I could of shortened the definition, but it is necessary to have the full meaning of the term.

How are the Credit Rating Agencies (CRA) Responsible?

Essentially, the Credit Rating Agencies (CRA), were in fact the ones that told these companies that they could sell these AAA bonds and packages and are now telling they can no longer sell them.  Interestingly they found that out after the the markets went down quite a bit.  Was the CRA really doing their job in the first place?  I think they are the ones to be blamed, and I feel that the American people have been robbed by these companies who obviously didn’t provide their services as intended.

After, several months they issued to some of the big bond insurance companies could no longer offer and sell their AAA (really good bonds) rated bonds.   The CRAs also downgraded most of these bond insurance companies.  Though, it was really unfair because these businesses were told by the CRAs that they could in fact sell them just weeks prior.  The CRAs clearly made a huge mistake, didn’t do their homework, and is now taking away from the American people.

Lawsuit? Yes I think so,  I believe, the entire USA, and people around the world who were affected by these companies decisions and actions caused by these companies have the right to legal action, for inaccurate information and now they the CRA are trying to get the bond insurance companies that have been so overwhelming affected by these ratings are now treating companies poorly like they did something wrong and downgrading them.  In an effort to save themselves the CRA did wrong and is now blaming everyone else though they were in charge of what bond insurance companies were worth to an extent.

Clearly they were not doing their job, and they should be repremanded for their mistakes nobody else but CRA.