The types of marketing offers (we refer to them more descriptively as scams) that have plagued ecommerce sites like Intelius are now facing U.S. government scrutiny. These scams are kissing cousins to the Scamville social gaming offers that we’ve written about recently.
Next week the U.S. Senate Committee on Commerce, Science, and Transportation will hold a full committee hearing on Aggressive Sales Tactics on the Internet and their Impact on American Consumers. This expands on a committee investigation into the marketing practices of a number of firms that supply these offers to partners.
They could sell tickets to this thing. I’d pay good money to be there.
Last week sixteen companies that conduct sales over the Internet were sent letters requesting information about their relationships with the three marketing companies being investigated by the panel – Vertrue, Webloyalty and Affinion.
The companies that received letters: 1-800-FLOWERS.com, AirTran Holdings Inc. (AAI), Classmates Online Inc., Continental Airlines Inc. ( CAL), FTD, Fandango Inc., Hotwire Inc., Intelius Inc., MovieTickets.com Inc., Orbitz, Pizza Hut, priceline.com, Redcats USA, Shutterfly Inc. (SFLY), US Airways Group Inc. (LCC) and Vistaprint USA Inc.
Adaptive Marketing, which works with Intelius, is a subsidiary of Vertrue. We outlined how these offers mislead consumers into agreeing to unwanted credit card subscriptions here.
Immediately after an ecommerce transaction takes place, buyers are presented with an offer to take a survey and/or get a partial rebate on their purchase. If they click yes, their credit card information is transferred to the ecommerce company and the user begins a difficult-to-terminate subscription to a worthless service.
Ecommerce sites that use these types of offers can get CPMs for the ads ranging from $2,000 – $2,500, say experts we’ve spoken with, and they make up a material percentage of revenue.
Update: Here’s what these offers look like. Users are tricked into clicking yes and get nothing of value in return.