Sarah Mirando  |  March 2, 2011

Category: Legal News

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Webloyalty Click Fraud Class Action Lawsuit
By Sarah Pierce

Webloyalty coupon

A federal class action lawsuit accuses online merchant Shopper Discounts, a subsidiary of Webloyalty.com, Inc., of running a “coupon click fraud” scam.

According to the Webloyalty class action lawsuit, Shopper Discounts lifts credit card information from shoppers when they 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. These pop-up windows, which promise a $10 cash rebate from the retailer on their next purchase, appear when consumers enter into online transactions with one of Webloyalty’s many e-commerce clients.

“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 action lawsuit 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 Webloyalty click fraud class action alleges the company 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 inbox, or ignored.”

“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 class action lawsuit states.

In addition to Webloyalty and Shopper Discounts, online retailer Woman Within is also named in the class action lawsuit, which is alleging all three companies violated the Electronic Communications Privacy Act and invaded consumer privacy. It is seeking punitive damages for larceny, fraud, trespass and obtaining money by false pretense for all persons or entities whose personal and/or credit card information was accessed by Webloyalty during online transactions with Woman Within as part of Webloyalty’s sales of its Reservation Rewards product, and for those chaged fees for a “Reservation Rewards” membership whose fees were not refunded in full, with interest, by Webloyalty.

A copy of the Webloyalty, Shopper Discounts Click Fraud Class Action Lawsuit can be read here.

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Updated March 2nd, 2010

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