TM Caught In Webloyalty

Ticketmaster is on the hook for $455,000 thanks to a deal it made with online marketer Webloyalty, which has agreed to pay $5.2 million in penalties and refunds to New York customers who were unwittingly charged for discount club programs.

Ticketmaster wasn’t the only, and certainly not the largest, company caught up in the Webloyalty scheme. TM, Pizza Hut, Orbitz Worldwide, Shutterfly and MovieTickets will pay a collective total of $3.3 million for refunds.

New York Attorney General Andrew Cuomo announced last month a $10 million settlement with Affinion Group and subsidiary Trilegiant, another online marketer, as well as its retail partners in a similar case in which consumers were enrolled in online discount clubs and through direct mail campaigns that sent checks to consumers.

“In this all too common Internet scheme, consumers were tricked into paying for monthly services for a discount club while shopping online at trusted retailers,” Cuomo said in a statement announcing the Webloyalty settlement.

Cuomo reportedly received hundreds of complaints about Webloyalty’s practice in which Internet shoppers were presented with cash-back offers on the websites of major retailers. If shoppers accepted the offers, they would be enrolled in trial periods for discount clubs offering things like movie and, apparently, concert tickets for a small monthly fee.

Many consumers either didn’t understand or never saw the fine print, discovering they were enrolled only after their credit cards were billed.

In some cases, consumers entered their e-mail address and clicked a button on a participating retailer’s website that stored credit card information for the purchase. That info was reportedly then passed automatically from that retailer to Webloyalty without the consumer’s knowledge, or without having been asked to re-enter it.

A number of online retailers, including Ticketmaster, that had allowed Webloyalty to piggyback on their sites agreed to pay penalties, Cuomo’s office said. Orbitz paid the largest tab, at $1.2 million.