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Retail

GameStop accused of deceptive advertising practices

Fri 05 Feb 2010 10:02am GMT / 5:02am EST / 2:02am PST
Business

Retailer is one of 22 to be investigated by NY's Attorney General

GameStop is one of 22 retailers being investigated by New York's Attorney General, accused of deceptively luring customers to sign up for discount membership programs via its online store.

According to Attorney General Andrew M Cuomo, unsuspecting customers are linked to external membership sites in order to obtain advertised discounts or cash-back offers.

The customers are then prompted to enter credit card information, while the details about what they're signing up for is buried in small print. Joining up to these schemes often results in small, recurring charges subsequently being taken from the customer's bank account.

"This online scheme has impacted the finances and tried the patience of tens of millions of consumers nationwide. Well-known companies are tricking customers into accepting offers from third party vendors, which then siphon money from consumers’ accounts," said Cuomo.

GameStop is just one of the retailers subpoenaed by Cuomo's office, alongside other well known chains such as Barnes & Noble, Ticketmaster.com and Pizza Hut.

Three program sellers also being investigated reportedly bring in revenues in excess of $1 billion per year, much of which Cuomo said is amassed through fraud.

Online movie ticket retailer Fandango has been the first of the companies to agree to end the practice of sharing customers' information with the discount programs. It also plans to pay $400,000 into a customer redress fund.

"I commend Fandango for doing the right thing by ending the practice of sharing consumers’ financial information with these discount club sellers. I expect the other businesses to follow Fandango's lead and adopt these reforms to protect consumers who shop online," commented Cuomo.

1 Comment

Andrew Clayton
QA Weapons Tester

150 7 0.0
Fine print is an evil yet necessary tool for corporations to protect themselves from lawyers and scammers, but when they begin to use it as a cudgel against innocent victims it only furthers the idea that businessmen are snake-like and purely profit driven. I hope the judge nails these companies to the wall.

Posted:4 years ago

#1

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