New York General Attorney Andrew Cuomo says he has issued a subpoena to 22 leading online retailers, including GameStop, as part of an investigation into 'deceptive practices' which lure buyers into making unwitting purchases.
In a statement issued last week, reported yesterday by Kotaku, the Attorney General said 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."
GameStop spokesperson Chris Oliveras told Kotaku,"I can confirm that we were subpoenaed. 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."
Other retailers included in the investigation includeBarnes & Noble, Orbitz.com, Buy.com, Ticketmaster.com and Pizza Hut. All these companies have alleged dealings with either Webloyalty, Affinion/Trilegiant or Vertrue, which are at the centre of the investigation and which, it's being claimed, are billing upwards of $1 billion a year to consumers.
As part of an agreement with Cuomo's office, online movie ticket retailer Fandango has already agreed to permanently end the practice of sharing customers' credit and debit card information to discount program sellers, and has agreed to pay $400,000 into a consumer redress fund. Cuomo says the investigation follows a number of public complaints to his department by disgruntled consumers.