Webloyalty Settles With NY AG For $5.2 Mil

Online “marketing” company Webloyalty has settled with the New York AG for $5.2 mil. You know how when you buy movie tickets and at the end it says, “You won a free $10 gift certificate!” And then if you read the small print it says that if you accept the gift certificate you get signed up for a discount club that charges a monthly fee? Yeah, that was their game.

Pictured: Webloyalty CEO Rick Fernandes

Webloyalty’s partners like Ticketmaster, Pizza Hut, Orbitz Worldwide, Shutterfly, and MovieTickets will have to cough up $3.3 million to consumers in refunds, fees, and education.

If you happened to have signed up for Webloyalty, you can get your “membership” cancelled and all your previous fees refunded by calling them at 1-800-361-1786. Readers report that it’s really easy to get your money back.

Remember that “free” can have a high cost, always read the fine print before agreeing to something, and to scan your credit card bill monthly for unexpected charges and dispute them immediately.

Online Marketer Settles With New York for $5.2 Million [NYT] (Thanks to David!)

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Edit Your Comment

  1. RyGuy1152 says:

    It’s morons like this that give marketing a bad name.

    • TC50327 says:

      It’s marketing that gives marketing a bad name.

      • apd09 says:

        Why is marketing that gives marketing a bad name? This had nothing to do with marketing and instead was sleazy business practice based on a model of deception. The marketing hook was get a $10.00 gift certificate, they used that entice people to sign up. It is the fault of the consumer for not reading the fine print.

        I was taught this in college taking marketing classes, and also at my first job “There is no such thing as a free lunch”. Somewhere, someone, at sometime is paying for that lunch. Just because something seems free to you does not mean it is without cost and that cost will be passed on to someone whether through the price of a product or through services rendered.

        Rethink you position because marketing had nothing to do with the lawsuit and it was instead the business and how they ran, there was no deception on their part they just knew that people would not read the terms and conditions and it is the fault of the websites that allowed them to be on sites for not protecting their customers.

  2. XianZomby says:

    I think I’ll cue up some Chuck Mangione. Cause this feels so good.

  3. Murph1908 says:

    Can they next go after the people who send you checks that sign you up for a fee service if you cash them?

  4. Macgyver says:

    If people just reads the fine print, they know what they getting into.

    • myCatCracksMeUp says:

      yay you!!!

      You’re the winner for writing the first “blame the victim” comment.

      • apd09 says:

        but blaming the victim is correct here. I saw those offers and read the terms and conditions, and realized it was a scam. There is enough blame to go around, the company had sleazy business practices but that does not absolve the consumer for failing to read what they were signing up for. There is consumer protection and the company was found guilty of deceptive business practices, but before the lawyers got involved the consumer protection was reading what you agree to.

        Do you think that people who fall for the Nigerian money scam are blameless for thinking they could get free money from a deposed dictator? What about the person who thinks they got an inheritance from a rich uncle in England, are they blameless for falling for that?

        There is equal parts blame for everyone and it is fair to assign 20% or more to the people who thought they were getting $10.00 for free.

        • myCatCracksMeUp says:

          If a person has at least average intelligence and still clicks the ‘accept’ buttons on the screens without reading and understanding what they are signing up for, then I’ll agree with 20% blame. Because even if they’re in a hurry and are being careless they shouldn’t click ok without knowing what they’re clicking on.

          But you do realize that half the population has less than average intelligence, right?

          While a lot of the bottom 50% are close enough to the halfway mark that they’re essentially “normal”, there are still, through no fault of their own (generally), some people just aren’t as smart. And that doesn’t mean they’re “retarded” either. There’s a huge area of intelligence that’s less than average but above mentally retarded. They’re capable of taking care of themselves and living a normal life, but they are more susceptible to scams. And fortunately there are laws in this country that outlaw the type of deceitfulness that these scams use to trick the susceptible, less intelligent people.

          I get so tired of all the arrogant jerks acting like everyone who gets fooled is a greedy fool who deserves it. Not having an understanding of, and empathy for people who aren’t as bright shows a lack of decency and character.

          • apd09 says:

            But you do realize that half the population has less than average intelligence, right?

            yes I do, but my belief is not much average intelligence as it is common sense.

            Not having an understanding of, and empathy for people who aren’t as bright shows a lack of decency and character.

            I never said I do not have compassion and empathy for them, they were sucked into a scam business model that was supported by reputable website that should have known what was happening. You said it below, and I agree, I am happy the websites as well as the company are being found responsible.

            But none of this changes the fact that common sense tells you if you are offered something for free like this that it might just not be free. I am not strictly blaming the person and have made that clear, rather just saying that ALL people need to accept part of the responsibility when they fall for things like this because most of the time it is avoidable.

    • AK47 - Now with longer screen name! says:

      Yes, to a large extent, but the big reason why this company should die in a fire is the way they used a person’s credit card information from a previous transaction, instead of having them enter it again for a free trial from a different company (an action that clearly says, “hey, you may get charged for this”.)

      Sure, it was in the fine print . . . sort of . . . so part of it’s on the consumer, but I don’t think it’s unreasonable for people to expect NOT to be charged by a company that they didn’t actually give their cc info to.

      I find it so sleazy that any of these companies would think it’s OK to pass a customer’s cc info to a 3rd party without explicit permission from the customer. (Well, excluding Ticketmaster – – I expect dodgy shit from them.)

  5. mrmcd says:

    So “marketers” are just scammers with slightly better lawyers?

  6. jessjj347 says:

    Isn’t that on Campusfoods too? I know someone who was suckered into it…

  7. myCatCracksMeUp says:

    I’m glad that both Web Loyalty and the corporations who used Web Loyalty on their sites will have to pay.

    And now that Web Loyalty has changed their software so that the customer has to enter their credit card number, name and billing address to authorize enrollment, I don’t think people will get inadvertently suckered into this scam.

  8. Robert Nagel says:

    I recently received a questionaire from Yellow Pages-Ohio asking for general information, address, phone number, etc. The form stated that they would “submit” our company name to Google and Yahoo. Big deal. In the fine print it said that by faxing the from back to them I was agreeing to use their services to “submit” our name to the internet for the next two years at $89.00 per month, renewable yearly unless I notified them 90 days prior to the anniversary date. Any costs to enforce the agreement would be my expense.
    What a deal, I could hardly restrain myself. On top of everything else it was from a company in the UK.

  9. scoosdad says:

    Now all we need are a couple more states to jump on the bandwagon and sue them too, and put them out of business completely….

    …..and by suing them too, you agree to enroll in their discount club for the low price of just $19.95 per month….

  10. Conformist138 says:

    The thing that bothers me is that the $5.2 million isn’t enough to really put them out of business. They started out by hiding all the fees in the mouse print and having their offers appear to be directly from the company you just completed a transaction with. They never had you re-enter your credit card information, which usually means there are no other financial transactions. Usually I’m skeptical of offers to the point of just never looking at them, but I came dangerously close to accepting this one thinking it was literally just a really awesome coupon from Pizza Hut (since at the time, I used them a LOT, figured maybe I’d uncovered a nice gem for actual loyal customers).

    So, due to Webloyalty starting out with practices that were just plain deceptive (and of course, like all scams, totally trying to hide behind the mouse print just so later people could blame the victims), I do not expect them to totally clean up their act later. Keep an eye out for them or similar companies, they are just as terrible as the “Download this ringtone!” companies that trick teenagers into signing up for monthly fees.

  11. ninjatoddler says:

    I’ve gotten an email about this from the AG a while back. Thought it was bogus.