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Generational Dynamics Web Log for 24-Nov-2009
How Priceline, Orbitz, FTD, 1-800-Flowers, Pizza Hut, and Continental Airlines are scamming you online

Web Log - November, 2009

How Priceline, Orbitz, FTD, 1-800-Flowers, Pizza Hut, and Continental Airlines are scamming you online

If you're seeing "mysterious" $10-20 credit card charges, here's why.

Here's how the scam works:

You make a credit card purchase online from Priceline or one of the other online retailers listed above. You provide a credit card number for the charge.

At the end of the transaction, you're at a screen that offers you a "reward" for making the purchase. The "reward" is a coupon of some kind, worth a few dollars. All you have to do is provide your e-mail address, and you'll get the coupon.

You're told to read a long screen in fine print containing terms and conditions. You don't bother to read it.

In particular, you don't read the part where it says that your credit card number will be kept on file, and you'll be charged $10-20 per month.

From that time on, your credit card is charged $10-20 every month.

The Senate Commerce Committee has been investigating this scam since May. A recent Commerce Committee press release lists the companies under investigation:

    1-800-FLOWERS.com, Inc.     Hotwire, Inc.            Priceline.com, Inc.
    AirTran Holdings, Inc.      Intelius, Inc.           Redcats USA, Inc.
    Classmates.com, Inc.        Movietickets.com, Inc.   Shutterfly, Inc.
    Continental Airlines, Inc.  Orbitz Worldwide, Inc.   US Airways Group, Inc.
    FTD, Inc.                   Pizza Hut, Inc.          Vistaprint USA, Inc.
    Fandango, Inc.

According to the Senate Commerce committee, there are three marketing firms under investigation: Affinion, Vertrue, and Webloyalty. These are the firms that charge your credit card every month.

This scam has netted more than $1.4 billion, by tricking millions of customers. According to the Senate reports, the managers at these firms are fully aware that they're tricking people -- in fact the whole online experience is specifically designed to trick people, and they're aware that customers are furious at being tricked, but they don't care because they're making so much money.

You know, Dear Reader, I'm almost sputtering mad as I type things. These companies, Priceline, Orbitz, etc., are supposed to be reputable companies, but instead they're run by people with no morals, no ethics, no decency. These companies are being run by cheap crooks.

There is a way to get around this problem, but unfortunately to do so you have to patronize the worst crook of them all: Citibank.

I've been using Citibank's "virtual credit card" number service for almost ten years, and it's saved me thousands of dollars.

With this service, when you type a credit card number online, or give one over the phone, the number you give them is a unique number obtained from the Citibank web site. When you obtain the number, you specify the maximum amount that can be charged, and you specify an expiration date. Only one vendor is allowed to charge to that number, and only up to the maximum amount and the specified date.

I really hate to say anything that endorses Citibank, since they're perpetrating criminal extortion by raising interest rates to 30%, and using the money to pay themselves million dollar bonuses.

But as loathesome as Citibank's behavior is, they have the only service of this type that I know of. Paypal and DiscoverCard offer similar services, but you can't specify a maximum amount or a time limit, so those services have only limited usefulness. Only Citibank's service does it right, as far as I know.

If you decide to use Citibank's service, make sure that you don't carry a balance on the Citibank credit card. At least that way they can't extort from you by charging you 30% interest.

I'm currently living through another example of a scam by a supposedly reputable company.

Those of you who have Comcast cable are aware that Comcast is forcing its customers to tune all channels through a cable box, no longer permitting you to bypass a box and use your TV set's tuner. They're providing customers with new DTAs ("Digital Transport Adapters"), and they're providing them for free.

I got two DTAs last week. Only one of the two worked, and after a couple of days, the one that worked froze up and stopped working. I went to the Comcast office and swapped them for new ones, and of the two new ones, only one works at all, and it doesn't get all the channels.

I've spoken to two different Comcast support people on the phone. One of them told me that the DTAs weren't working for most people, and if you want working boxes, then Comcast wants you to spend $8.00 apiece per month for upgraded cable boxes. He all but said that the DTAs were a Comcast scam. The second Comcast support person denied that it was a scam, but she agreed that my only real choice was to pay an extra $16.00 per month. And these statements are from Comcast employees.

All of these companies know that they're scamming customers, but they don't care because they're making so much money. These people have no morals, no ethics, and no decency.

I always receive some criticism when I blame Generation-X for things like this, but by this time, almost in the year 2010, all of these companies' decision makers are Gen-Xer's. Throughout my life, I've been aware of a few people who are crooks, but today, with Generation-X in charge, being a crook is the norm.

For those of you who are decent, honest, ethical, hard-working members of Generation-X, I apologize for appearing to be stereotyping you, but what we're seeing here is that "the bad drives out the good." That is, the few Gen-Xers who are crooks have succeeded in driving out the hard-working decent people from businesses like Citibank, Comcast, Priceline, Orbitz, etc., and all that's left in these businesses are people with the ethics and morals of something you might find under a rock -- and who are proud of themselves, because they're making so much money by screwing you.

(Comments: For reader comments, questions and discussion, see the Financial Topics thread of the Generational Dynamics forum. Read the entire thread for discussions on how to protect your money.) (24-Nov-2009) Permanent Link
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Generational Dynamics Web Log for 24-Nov-2009 How Priceline, Orbitz, FTD, 1-800-Flowers, Pizza Hut, and Continental Airlines are scamming you online

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Generational Dynamics Web Log for 24-Nov-2009
How Priceline, Orbitz, FTD, 1-800-Flowers, Pizza Hut, and Continental Airlines are scamming you online