The U.S. Senate Committee on Commerce, Science and Transportation are investigating loyalty programs from companies including Vertrue, Webloyalty, and Affinion that generated $1.4 billion with credit card information given to them by their marketing partners - which include Yahoo - without the knowledge of most of the customers, Cnet reported.
"The government says the investigation shows that Webloyalty, Affinion, and Vertrue "trick" consumers into entering their e-mail address just before they complete purchases at sites such as Orbitz, Priceline.com, Buy.com, 1-800 Flowers, Continental Airlines, Fandango, and Classmates.com. A Web ad, which many consumers say appears to be from the retailer, offers them cash back or coupon if they key in their e-mail address," Cnet stated.
Since no credit card information is asked for by these promotions. customers took advantage of reduced prices from "trusted" vendors and had to read the small type - which virtually no one does - to discover they would be charged monthly by the program - between $9 and $12.
Yahoo is amongst the companies that received between $1-10 million through the arrangement, according to government figures.