Klobuchar Announces Passage of Bill Banning Deceptive Online Sales Practices

Press Release

Legislation would eliminate underhanded tactics that charge consumers for services they were unaware they purchased

U.S. Senator Amy Klobuchar announced today that legislation to prevent deceptive online sales tactics has passed both Houses of Congress and will be sent to the President to be signed into law. The Restore Online Shoppers' Confidence Act was introduced after several Senate Commerce Committee reports revealed that companies are using misleading sales tactics to enroll online consumers in costly services without their consent. Klobuchar, a member of the Senate Commerce Committee, is an original cosponsor of the legislation. She held an event in Minnesota last year with Prentiss Cox, a legal expert in consumer protection, along with victims of online fraud to call attention to this growing problem.

"As a former prosecutor, I've always believed that our laws must keep up with our technology," Klobuchar said. "This bill will root out "bad actors' and create a level playing field where companies compete based on the quality of their products and services."

The initial Senate Commerce 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 these companies have used deceptive online sales tactics to charge millions of consumers for membership clubs and services those consumers were unaware they had purchased.

The report also found that these companies partner with hundreds of legitimate websites that use their customers' billing information -- including credit and debit card numbers -- for financial gain. Additional reports have detailed a number of tricks and duplicitous practices used to prevent consumers from recovering the money they lost from improper charges.

The Restore Online Shoppers' Confidence Act will help put an end to the deceptive online sales tactics uncovered by the Commerce Committee's investigation. 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 personal 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 that consumers will not end up paying recurring fees for goods and services they did not intend to purchase.

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