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CNN: Congressional Report Faults Online Marketing Practices

Wednesday Nov 18, 2009

CNNMoney.com reports that three marketing firms and hundreds of their online partners made more than $1.4 billion using misleading sales tactics, according to a report issued Tuesday by Senate Commerce Committee Chairman John D. Rockefeller IV (D., W.Va.).Affinion Group Inc., Vertrue Inc. (VTRU) and Webloyalty Inc., enrolled consumers in club memberships, sometimes without the consumers’ knowledge or consent, researchers said in the report, released before a hearing Tuesday.None of the companies or their online partners testified Tuesday. The three firms previously have settled lawsuits brought by consumers or by states on behalf of consumers, and recently made changes to their marketing practices. Lawmakers suggested that may not be enough and that legislation may be needed.At issue are enrollments that came as consumers shopping on popular Web sites such as Priceline.com Inc. (PCLN) or 1-800-Flowers.com Inc. (FLWS) clicked on pop-up ads offering rewards for joining an online membership service. Pop-ups typically appeared after consumers provided payment information to the Web site operator, which was passed along to the marketers automatically, the report found.What do you think of the Senate’s look at Online Marketing? We’d like to hear your thoughts.Congressional Report Faults Online Marketing Practices

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