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Sunday, May 21, 2006 - Page updated at 12:00 AM


Keep Your Money

A scam pops up

The Washington Post

Your first clue something's wrong is when you notice a random charge on your monthly credit-card statement, maybe as little as $9.95, paid to a company whose name draws a blank.

You have no recollection of buying anything from any such company. And then, you discover that you hadn't noticed the same stinkin' $9.95 charge from the same company on your statement the month before, and the month before that, and ... well, you get the idea.

"I was asleep at the switch, so I've got to shoulder some of the blame ... but I think this might be a scam," says Ben Beach, an editor at the Washington-based Wilderness Society, who last September noticed a $9.95 charge on his Visa statement from AP9 Connections.

Beach called the company's toll-free number on the statement, and a customer-service rep told him his wife "had signed up for this discount travel service while on [the travel Web site] Orbitz," he says. But Beach insists that his wife never clicks "yes" on pop-up ads.

F. Barbante of Fairfax, Va., says he found a similar charge on his Visa Platinum card last February and was stunned to find out it had been going on for two years and totaled $406.

"My wife thought the charges were mine, and I thought they were hers," he says of the charges — $14.95 for each of seven months to MWI Homeworks Plus and $18.95 a month to AP9 Homeworks Plus thereafter. Both are buying clubs owned by Vertrue Inc., a Connecticut member-services marketing company.

The sales technique is called a "negative-option plan," one of those shady but legal deals in which consumers are automatically charged for services or products until they take action to say they don't want them

Companies that use negative-option sales typically defend their business practices by saying that consumers simply don't recall signing up, or saying that someone in the household must have clicked "yes" to accept an Internet pop-up ad's offer. Jim Hood, founder and editor of, a consumer news and advocacy Web site, has heard the story often. Although a few state attorneys general have "administered a sharp slap on the wrist" to Vertrue (formerly MemberWorks), Hood says "the prevailing legal opinion seems to be that these schemes are operating within the law."

The Better Business Bureau has 2,218 complaints against AP9 buyer clubs. Ed Magedson, founder of, a consumer complaint and advocacy site, says he has received more than 2,400 e-mail complaints about AP9 clubs and 4,758 e-mail complaints about WLI Reservation Rewards.

Richard Fernandes is chief executive and founding partner of, the Norwalk, Conn., member-services marketing company that has partnered with 110 companies to make its offers through their Web sites. Last year, WebLoyalty's revenue exceeded $108 million.

He says most of the complaints against his company are several years old and that has corrected its businesses practices that caused problems.

Now, he says, makes the terms of membership clear and sends five e-mails over 30 days to new members to make sure they understand what they're getting into. Adaptive Marketing LLC, Vertrue's management and marketing arm, promotes a no-questions-asked, full-refund policy on its Web site, but the policy apparently doesn't extend throughout its negative-option empire that, according to a Vertrue financial report last month, is expected to bring in $650 million in revenue in 2006.

"I had to make three calls to drop this 'service,' " says Beach. Eventually, a supervisor agreed to refund "a month or two" of the payments and to cancel the account, he says.

So how do consumers protect themselves? Besides not agreeing to unsolicited deals online or filling out online surveys that pop up, Magedson warns against clicking anywhere — not just on the "yes" icon — on Internet pop-up ads. As soon as you do, he says, these buyer clubs are able to get your credit card info by tracking the transaction.

"You never even want to click the X in the corner if you are suspicious of a pop-up," he says, explaining that some dishonest advertisers "crosswire" pop-ups so that clicking the X is the same as clicking "yes." "Instead," he says, "press the control-alt-delete buttons, and when the task-bar manager comes up, press 'end task' for the title of that pop-up."

Edward Johnson, president of the Greater Washington Area Better Business Bureau, recommends a careful review of your credit-card statement every month.

Copyright © 2006 The Seattle Times Company




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