Wash. AG urges Congress to target nefarious online sales practices

Chris Rizo Nov. 19, 2009, 5:50am

Rob McKenna (R)

OLYMPIA, Wash. (Legal Newsline) - Congress ought to get tough on companies that use deceptive online sales tactics, Washington Attorney General Rob McKenna told a U.S. Senate committee this week.

In written testimony to the U.S. Senate Committee on Commerce, Science and Transportation, the Republican attorney general said consumers are being beguiled by some companies operating in cyberspace.

"As e-commerce has flourished, so, too, unfortunately, have deceptive practices on the Internet. One of the significant advantages for consumers to shopping online has been the convenience and efficiency of the experience," McKenna wrote. "What might take hours in the brick and mortar world to accomplish may take only a few minutes online. This has not been lost on some unscrupulous marketers who are exploiting consumers' expectations of a quick and efficient transaction process."

The attorney general said certain marketing methods have been used to purposefully deceive consumers into paying monthly membership fees for services they didn't want.

"I cannot overstate the consumer injury that is occurring because of these marketing methods," McKenna wrote. "Based on our office's investigations, we estimate that well over $50 million has been deceptively obtained from Washington consumers over the course of the last four years by a relatively small handful of businesses conducting the type of marketing at issue in the committee's investigation."

A recent committee report -- "Aggressive Sales Tactics on the Internet and Their Impact on American Consumers" -- said Internet companies including Affinion, Vertrue and Webloyalty and their affiliates have earned more than $1.4 billion in the last decade by duping consumers.

McKenna proposed legislation in his home state last year to address Internet promotions and "free trials." The legislation died in committee.

The plan would have required companies using free-to-pay conversion offers to obtain a consumer's express agreement before billing them for goods or a service.

McKenna's office is drafting similar legislation for the upcoming legislative session, his office said.

McKenna and 14 other state attorneys general reached a $14.5 million multistate settlement with Affinion, then known as Trilegiant, and Chase Bank in 2006. The companies were accused of mailing consumers checks. By cashing the check, a customer supposedly agreed to enroll in one of Trilegiant's many programs.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

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