Beware: Online scams very prevalent

EAST PROVIDENCE, R.I. (WPRI) - Shopping online can be convenient, but many consumers have ended up getting scammed after using certain web sites.

Pop-up ads can be annoying, many of us simply ignore them. But from time to time, these ads can catch our eye. But if you're not careful, they can cost you big.

Millions of Americans who shop online are unsuspecting members of online discount clubs.

Eileen Gibson bought a book online when an offer popped up.

"I thought, wow, I'm going to get money for spending money! And of course I clicked on it," a said Gibson.

After Sean Painter bought movie tickets on Fandango, a mysterious, reoccurring charge appeared on his credit card statement.

"I didn't see any check boxes or anything that would make me aware of anything I was enrolling in other than buying two movie tickets," said Painter.

One click and Painter was directed to another company's website and automatically enrolled in its rewards program. Without authorization, the company, Webloyalty, charged monthly fees to the credit card he used to buy the tickets.

The companies claim they've told consumers everything they need to know, it's all in the fine print. Three internet companies, Webloyalty, Affinion and Vertrue were blasted in a congressional report last november for engaging in aggressive sales tactics and charging consumers millions of dollars for unwanted services.

Under scrutiny now by the New York state attorney general's office, subpoenas have gone out to the web companies and to 20 retailers that investigators say pass along its customers' account information in exchange for lucrative contracts.

Ben Edelman of Harvard Business School said, "The internet is the equivalent of the wild west and it takes the sheriff a while to get there"

Some retailers have ended their contracts with these companies and all three Webloyalty, Affinion and Vertrue said they're changing the way they do business. Still, Chuck Bell of Consumers Union says even with heightened enforcement consumers need to be ever-vigilant.

"The new scams are always being developed partly because technology advances very rapidly and there is a huge financial incentive," said Bell.

The companies in this case made hundreds of millions of dollars.