From Florida Senator Bill Nelson

Earlier this week, I attended a Senate Commerce Committee hearing about an insidious practice that some Internet companies are using to trick online shoppers into paying monthly fees to join so-called “consumer discount clubs.”

Consumers who frequently use the Internet for even the most ordinary of transactions—from purchasing movie tickets to looking up high school classmates—are enticed with images of rebates and other coupons. When they fill out a form to claim the savings, they might be enrolled in the “clubs” that charge a monthly fee of $10 to $20.

And here’s the most deceptive part—they can be signed up for these clubs without ever disclosing a credit card number. The clubs partner with the website the consumer originally visited, which passes along the credit card number—and splits the profit from the monthly fee.

As a result, consumers often do not know these companies have their credit card numbers until they start seeing unusual and unfamiliar charges on their statements.

According to a report by Commerce Committee investigators, there have been more than 30 million consumer enrollments in these clubs, and several million people are unknowingly enrolled at any one time.

If you don’t think it can happen to you, listen to what Floridian Ray France told the Commerce Committee at the hearing: “I am twenty-seven years old. I use the Internet constantly. I both understand it and am able to use it with ease. I have even earned college credits in computer applications. With that said I believe it is easy to see I would not have agreed to a financial obligation I knew nothing about nor wanted. It is still unclear to me at this point how they were able to access my account. That is unless you consider the fact that this company chooses to use deceiving methods in correlation with other companies to take advantage of online consumers. This is nothing short of theft.”

So what can you do to protect yourself when shopping online?

• Be wary of coupon and other savings offers that pop up after an online transaction.
• Always read the fine print before clicking on any online offer.
• Check your credit card and bank statements carefully each month for any unfamiliar charges.
• If you find a charge you suspect might be from one of these clubs, verify it with your credit card company and then report the instance to the appropriate law enforcement and business authorities. A good starting point is the Federal Trade Commission’s On Guard Online website.