Webloyalty Named in Federal Lawsuit

Consumers' Credit Cards Charged Without their Knowledge, Suit Charges

September 11, 2006

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Federal lawsuits against online marketing company Webloyalty.com Inc. and online movie ticket seller Fandango Inc. accuse the two of charging customers' credit cards monthly fees without their knowledge.

The lawsuit, filed in U.S. District Court in Massachusetts, said that when customers bought from one of Webloyalty's partners such as Fandango and clicked on a pop-up window offering a $10 coupon on their next purchase, their credit card information was automatically transferred to Webloyalty and they were unwittingly enrolled in its "Reservation Rewards" program.

The suit charges that, once enrolled in Webloyalty's rewards program that promises dining movie ticket and shopping discounts, consumers' credit cards are billed up to $10 each month. The lawsuit is seeking class-action status and unspecified damages.

"Hundreds, if not thousands, of consumers have complained to Webloyalty and local, state and federal consumer protection agencies about the deceptive nature of its sales of its 'Reservation Rewards' discount club product and its unauthorized access to their credit card information," the complaint said.

The plaintiff named in the lawsuit, Joe Kuefler, bought movie tickets from Fandango and was unknowingly enrolled in Webloyalty's rewards program.

The lawsuit also claims that the two companies violated consumers' privacy rights by disclosing and using their credit card information.

Other sites allegedly participating in the scheme included Petco.como, Drugstore.com and Staples.com.

Webloyalty, based in Norwalk, Conn., calls itself "a leading provider of technology-based affinity services" to more than 120 e-commerce and travel businesses. Gilbert will relocate to Webloyalty headquarters in Norwalk, CT from Silicon Valley.

The company recently announced deals with NASCAR and Stoneacre, Inc.

Founded in 1999, Webloyalty was recently named the fastest-growing technology company in the state by Deloitte's "Technology Fast 50 for Connecticut" and the 8th fastest-growing technology company in North America by Deloitte's "Technology Fast 500" programs.

NASCAR said last month that via a redesigned Web site, club members will get access to 160,000 local and national discounts, including up to 50 percent savings at attractions, amusement parks and restaurants as well as retail and movie ticket discounts.

Webloyalty redesigned the site and also will manage member services and order fulfillment for the club, NASCAR said.

Stoneacre operates NASCAR RacePoints, NASCAR's official rewards program.

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