Responding to complaints about unauthorized credit card charges, Senate Commerce Committee Chairman Jay Rockefeller (D-WV) is asking credit card companies what they know about the practice.
In a letter to Visa, American Express and Mastercard, Rockefeller said aggressive online sales tactics often end up with consumer's credit cards charged for unwanted club memberships.
Rockefeller says millions of online consumers have been enrolled in these membership clubs and their credit card or debit cards have been charged even though they never provided the companies with their credit card or debit card numbers.
"There are more than 4 million American consumers whose credit cards are being charged by mysterious membership clubs after shopping online and most of these four million consumers don't even know it's happening," Rockefeller said.
Rockefeller sent the letters after a Commerce Committee staff report and hearing showed that a key component of the aggressive online sales tactics is the use of a so-called "data pass" process, which enables websites to transfer consumers' billing information, including consumers' credit or debit card numbers, to the companies selling the club membership.
Rockefeller maintains "data pass" has allowed these companies to present misleading enrollment offers to consumers, has led to significant consumer confusion, and has caused millions of American consumers to become enrolled and charged for membership clubs they did not want and were unaware they had signed up for.
"Through the Committee's investigation, we learned these online club scams have made more than $1.4 billion dollars through these tactics and charged more than 30 million Americans," Rockefeller said. "This next step in our investigation will help us better understand how millions of American consumers' credit card accounts can be charged every month for services they don't want."
One membership marketer responded to Rockefeller's assertion by saying enrolling in its programs requires more than a simple mouse click. In a statement, Webloyalty.com said it requires consumers to enter the last four digits of their credit card, confirm their email address, and click on a button to confirm the sale.
Over the years, ConsumerAffairs.com has received hundreds of complaints from consumers who express bewilderment and anger at being signed up for membership programs, providing discounts on travel, entertainment and other expenses. The mysterious charges usually coincide with a credit card purchase made with another company.
The letters Rockefeller sent to Visa, American Express, and MasterCard request information related to cardholder inquiries about unauthorized charges stemming from "data pass" and any efforts made by the companies to reduce the number of "chargeback" requests from cardholders. Visa, American Express, and MasterCard have likely processed millions of charges for membership clubs that were not authorized by cardholders, Rockefeller said.