The New York State Attorney General's office announced last week that it was issuing subpoenas to 22 popular online retailers, including GameStop, as part of an investigation into how the sites may share credit card information with other companies.
A news release from the office of New York Attorney General Andrew Cuomo explains what is described as a practice that "deceptively link[s] unsuspecting consumers to fee-based membership programs that charge unauthorized feeds under the guise of discount offers."
The AG's office describes in fuller detail:
Cuomo's investigation has found that when consumers shop online from familiar retailers, they are often presented with a discount or cash-back incentive offer as they complete their purchase. When consumers click on the discount or incentive banner, they are unknowingly directed to a membership program seller's Web page that is separate from the online retailer's site. The consumer is then instructed through large, colorful print and voice prompts to accept the discount or incentive. Information about joining the membership program and its ramifications, including the fact that the consumer is agreeing to transfer his or her credit or debit card account information, is buried in fine print and cluttered text. Small and recurring charges then begin to appear on consumers' credit or debit card bills from unfamiliar companies. Because of the low dollar amount, the charges may go unnoticed for some time.
The three discount companies in question are Webloyalty, Affinion/Trilegiant and Vertrue. The AG's office has issued subponeas to 22 "well-known merchants" that deal with them, including GameStop, FTD.com, Orbitz.com, Travelocity and more.
Cuomo's office reports that it already got movie ticket seller Fandango to agree to change its linking practices. MSNBC reports:
The company will now warn customers if they are about to be leave the Fandango Web site. It will also warn customers when an incentive is offered for joining a membership club from a separate company. Fandango has agreed to pay $400,000 in restitution to customers.
Reached for comment this afternoon, GameStop vice president Chris Olivera said the company is working with the AG's office.
"I can confirm that we were subpoenaed," Olivera said. "We are still reviewing the matter but do intend to work fully with the New York AG's office. Beyond that, I would not be able to provide any additional comment."
CUOMO INVESTIGATING 22 POPULAR ONLINE RETAILERS FOR LINKING CONSUMERS TO DISCOUNT CLUBS THAT CHARGE HIDDEN FEES [press release from New York State Attorney General's office]