Webloyalty is an online marketing company and the parent company of the UK company Shopper Discounts & Rewards.[1] Its founding partner and CEO is Richard Fernandes.[2] The company describes its business as "[helping] e-commerce companies build business by generating additional revenue while providing their customers with valuable offers and services".
The company, along with Affinion Group and Vertrue, have been investigated by the United States Senate Committee on Commerce, Science and Transportation for what senators said are fraudulent business practices, whereby consumers are enrolled in a "membership rewards" or "loyalty" club, often without their knowledge, after having purchased something through a separate website. [3] The committee investigation found that Webloyalty and other "loyalty club" companies "used aggressive sales tactics to enroll online consumers in services without their consent". [4] After concluding its investigation, the chairman of the committee, Jay Rockefeller, introduced a bill that seeks to force "loyalty clubs" to disclose more information to consumers. Webloyalty responded to the bill's introduction by saying it had refined its practices to help address senators' concerns and that it will fully comply with the bill once it is enacted. [5]
Webloyalty and other loyalty companies had contracted with many popular retail websites, including Continental Airlines, Buy.com, Orbitz, Priceline, Classmates.com, FTD, and Shutterfly, among others. When a consumer made a purchase on one of these sites, typically they would be asked if they would like to sign up for one of several varieties of "membership rewards" or "coupon" programs, in exchange for a monthly fee (often explained in fine print). If the consumer answered yes, then they would be enrolled in the reward program and their credit card data automatically transferred from the retailer to Webloyalty without the consumer actually entering it again (a practice known as "data pass"). Because the consumer wasn't prompted to enter payment data the second time, many were unaware that just clicking yes enrolled them in a monthly paid program, often discovering it months later while looking over a credit card statement. After the Senate began investigating, some retailers (including Continental Airlines and others) dropped their association with loyalty companies such as Webloyalty.[6]