Apparently, shopper’s confidence was so high that some retailers needed to have Congress step in and tell them not to unethically take advantage of online consumers.
According to the FTC, The Restore Online Shopper’s Confidence Act “prohibits any post-transaction third party seller (a seller who markets goods or services online through an initial merchant after a consumer has initiated a transaction with that merchant) from charging any financial account in an Internet transaction unless it has disclosed clearly all material terms of the transaction and obtained the consumer’s express informed consent to the charge. The seller must obtain the number of the account to be charged directly from the consumer.” (Read PDF of the Restore Online Shopper’s Confidence Act here.)
The Act prevents online retailers from sharing customers’ billing information with outsiders and requires internet marketers to get consumers’ consent before charging for goods and services. The law is the result of a 2009 Senate investigation launched after thousands of consumers complained about being billed for services they didn’t recall agreeing to buy. Often, they discovered something was amiss only when charges started appearing on their bank statements, according to a report released by the Senate Committee on Commerce, Science, and Transportation.
According to the report, the marketing scheme worked like this: Consumers would submit credit or debit card information to make a purchase on a retailer’s website. Before they clicked to confirm the purchase, an ad from an outside marketer would pop up offering a free trial for magazines, a club membership or other services. Customers couldn’t complete their purchase until they agreed to the free trial or clicked on a less-noticeable link to decline.
If consumers accepted the free trial, they would have to cancel once it was over to avoid being charged. Many consumers didn’t realize this, and so they were automatically billed by the marketer that got their billing information from the retailer, the report said.
Besides restricting retailers from sharing your information, the new law requires marketers to provide greater disclosure and to obtain billing information directly from the consumer. A marketer also can’t automatically bill customers unless it gets their consent first and provides an easy way for them to stop any recurring charges. Many e-commerce website owners have increased shopper’s confidence significantly by offering several protective services such as guaranteed shipping and identity theft protection.
When you’re shopping online, be vigilant.
Young, for instance, advises linking a credit card with a PayPal account to make purchases online. That way, if there is a dispute, you will have PayPal and the credit card issuer on your side to help resolve it, he says. If you are on a website that provides buyer protection services like 4x Buyer Protection, you can shop confidently, knowing that your online consumer experience will be a pleasant one.
Read about the Act from the Federal Trade Commission by following this link.