Seniors: Avoid Online Fraud

All of us, no matter what our ages, need to take care when we buy things online.  There is so much to learn about the  online world, and deceptive or fraudulent practices take advantage of any gap in our knowledge. When you read the rest of this post about deceptive practices related to online purchasing, you will resolve to focus even more on being careful when you purchase items online. Don’t stop using the web to make convenient online purchases, but do be savvy and careful.

Many online catalog companies — some of them retailers that we have trusted the most — have participated in a type of online post-transaction marketing deception, and the U.S. Senate Commerce Committee held a hearing on the problem in mid-November. The hearing shared results of an investigation of overly aggressive sales tactics that resulted on unexpected and sometimes recurring charges on credit cards. You can even watch the  Senate Commerce Commitee archived webcast of the hearing (but the editors forgot to take out a long period of time when the cast seemed to start but nothing happened … so be patient).

Read about these deceptive practices at the CNET news site. Especially check out the graphic at the end of the article that shows how many of the online retailers  bought into these practices. Professor Robert J. Meyer of the Wharton School of Business at the University of Pennsylvania attended the hearing and submitted this statement. Links to other submitted statements, including those of the majority and minority chairs are at the end of this post.

Basically online shoppers have been tricked into signing up, unknowingly, for loyalty programs that bill their credit cards. This occurs while shoppers are making purchases at trusted vendors, right at the end of the transaction. If you have ever clicked on a coupon deal at the end of an online purchase, keep an eye out for any unusual or recurring charges on your bank credit card, and avoid these “deals” in the future. Go over credit cards for the past year. Read this statement by Linda Linquist from Wisconsin telling about  her experience with these loyalty charges.

The deception works because it looks like a buyer is providing info to the vendor at the end of a transaction. The purchaser is presented with a screen that asks (or congratulates/offers)  to save $10 (maybe providing a coupon). The buyer is simply asked to type in an e-mail address, so most people assume they are giving information to the vendor. The deception occurs in the fine print.  By putting

In the fine, fine print, it tells the person that he or she is signing up for a “loyalty program.”  Vendors (places thought to be trustworthy) have been giving the purchasers credit card info to the loyalty program so that the other company could enroll a person into the program because that person “agreed” to this by typing in an e-mail address.

Post transaction partners have made millions of dollars (see chart at the end of the CNET article) working with these loyalty companies (and giving away loyal customers’ credit card info).  The loyalty companies have made nearly 1.5 billion. At this point well known catalogs and travel sites, airlines and other vendors cannot distance themselves and get out of the programs fast enough …

Similar deceptions have been  going on in the phone world for ages — – people suddenly  discover charges for services on telephone bills.

The important thing is to check your cards and phone bills carefully, and not click on any “good” deals when you make online purchases or pay bills.  Do check out the retailer chart that details retailer partners and their profits from this deception.

One thought on “Seniors: Avoid Online Fraud

  1. Pingback: Helping Aging Parents (and Ourselves) Avoid Scams « As Our Parents Age

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