Class Claims 'Webloyalty' Runs Online Larceny
HARRISONBURG, Va. (CN) - A federal class action, led by a girl who bought her mom a present, claims Internet merchant Shopper Discounts, a subsidiary of Webloyalty, runs a "coupon click fraud" in which it lifts credit card information when shoppers click on a pop-up ad, then steals $12 a month for a so-called "membership" the shoppers never asked for, were not aware of and don't want.
"The uniform business practice at issue in this case is as simple as it is deceptive and devious," the class claims.
The class, led by 15-year-old Danielle Stryker, says the pop-up windows appear when consumers "enter into online transactions with one of Webloyalty's many e-commerce clients."
The pop-up promises a $10 cash rebate from the retailer on their next purchase.
"Once the consumer clicks the 'pop-up' window and enters their e-mail address to redeem their free $10 discount, their personal information, including their credit or debit card number, is automatically transferred to Webloyalty," the class claims. "Webloyalty then automatically bills the consumer's credit card for a flat monthly fee of $12 for a membership in its 'discount club' on a purported 30-day trial basis."
The company allegedly e-mails consumers to tell them they can cancel their membership within 30 days, but "more often than not, such e-mails are typically recognized as 'spam' that is disregarded, automatically filtered out of the consumer's e-mail box, or ignored," according to the complaint.
"Consumers' credit or debit accounts are then billed month after month for this 'membership program,' of which the consumers had no knowledge and which they never accepted. To add insult to injury, the 'membership program' does not provide consumers with any benefit whatsoever," the complaint states.
Webloyalty pays its retailer accomplices for signing up consumers, the class claims.
The complaint also names Woman Within as a defendant. The company is the online retailer that Stryker used to buy a gift for her mom.
Stryker says she saw the pop-up and clicked "continue" to proceed with her purchase and 14 months later she saw the $12 check card purchase on her checking account, posted for Shopper Discounts. Then she discovered similar monthly charges dating back to her original purchase.
She says the company agreed to cancel her "membership" but refused to refund the 14 months of payments it collected from her.
The class claims Shopper Discounts and Woman Within violated the Electronic Communications Privacy Act, were unjustly enriched and invaded consumer privacy. It also seeks punitive damages for larceny, fraud, trespass, and obtaining money by false pretenses.
The class is represented by Marilyn Solomon of Winchester, Va.