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Washington State Attorney General Rob McKenna took a leading role in encouraging Congress to get tough on companies that engage in deceptive online sales tactics. McKenna’s written testimony Tuesday to the U.S. Senate Committee on Commerce, Science and Transportation describes how certain marketing methods have been purposefully used to 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.
“Our investigations have gathered an extraordinary amount of evidence showing that companies engaging in this form of marketing are aware that their marketing and billing practices are deceiving consumers,” he continued, “and that the vast majority of consumers enrolled in their membership programs never authorized the enrollment.”
McKenna’s concerns parallel those expressed by the committee in a new 35-page investigative report, "Aggressive Sales Tactics on the Internet and Their Impact on American Consumers.” The report charges that Web 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 last year to address Internet promotions and “free trials.” The legislation, which died in committee, would have required sellers using free-to-pay conversion offers to obtain a consumer’s express agreement before billing them for goods or a service. The bill would have required such companies to obtain payment information directly from the consumer, rather than from a third-party marketer. The AGO is drafting similar legislation for the upcoming legislative session. For more information, please see today's news release.