Techcrunch has a post up about congressional hearings next week into the marketing practices of a number of companies with linked to some questionable ecommerce practices. Similar to the social network gaming scams, the practice in question here involves getting consumers locked into a monthly subscribed charge that is very difficult to cancel. Here's how Michael Arrington describes the scam:
Immediately after an ecommerce transaction takes place, buyers are presented with an offer to take a survey and/or get a partial rebate on their purchase. If they click yes, their credit card information is transferred to the ecommerce company and the user begins a difficult-to-terminate subscription to a worthless service.
It's worth noting that the companies that have received letters about testifying are not fly-by-night scam businesses. Most are actually names that you will immediately recognize.
The companies that received letters: 1-800-FLOWERS.com, AirTran Holdings Inc. (AAI), Classmates Online Inc., Continental Airlines Inc. ( CAL), FTD, Fandango Inc., Hotwire Inc., Intelius Inc., MovieTickets.com Inc., Orbitz, Pizza Hut, priceline.com, Redcats USA, Shutterfly Inc. (SFLY), US Airways Group Inc. (LCC) and Vistaprint USA Inc.
So why would they participate in this type of business? Arrington notes that,
Ecommerce sites that use these types of offers can get CPMs for the ads ranging from $2,000 – $2,500, say experts we’ve spoken with, and they make up a material percentage of revenue.
The full post,
Next Week: U.S. Senate Committee Hearing On Aggressive Internet Sales Tactics, has more links and example of what the offer looks like. Check it out.
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