A class action filed in California claims there'ssomething fishy about Snapfish, Hewlett Packard's photo-hosting and products website. The lawsuit claims Snapfish illegally shares credit card information from customers with a third party. The third party then tricks Snapfish customers into purchasing a monthly service plan by baiting them with a $10 gift card.
"Stealing Its Customers' Money"
The alleged fraud takes place after Snapfish nets customers' credit card information for the purchase of goods or services on the Snapfish site. The customer proceeds to checkout through a series of screens, including one managed by a third party, a company called Regent, which does business as Encore Marketing. The screen is designed to look like the Snapfish site. There, it's alleged, Encore Marketing fools customers into enrolling in a monthly fee service called Snapfish ValuePass by enticing them to click on a $10 gift card offer.
Safe Online Shopping: A Few Simple Rules
If you shop the internet chances are it won't be long before you come across this type of bait-and-switch tactic – or worse. Mark Stein, a partner at the Florida law firm Higer Lichter & Givner, has seen just about every online swindle there is. He's compiled "Basic Rules for Online Shopping" also known as the "Consumer Common Sense Rule for the Web." Let's have a look at a slightly abbreviated version:
- Read the Privacy Policy – It's usually accessed by a link at the bottom of the website's home page. It will say if the company shares your information and with whom. Caution: Sharing information with "affiliates" is often code for sharing information with third parties.
- Keep Reading – Don't stop with the privacy policy. Before agreeing to anything, read the entire offer to make sure you understand what you are agreeing to. Otherwise, you may unknowingly commit to an extended contract with a $24.99 monthly payment for something you do not want. These so-called "negative option" plans are regulated by federal law. They are not illegal, provided the offering company complies with certain requirements.
- Pay with Credit Cards – Don't pay with a debit card or check; use credit cards. It's much easier to dispute charges, the money doesn't leave your account and you're liable only for the first the first $50 of an unauthorized charge. Ideally, have one card that you only use for online purchases.
- Save Copies of Orders and Receipts – Keep the orders and receipts in an electronic folder, or print them out if you prefer. This way you have a record of what you ordered and received and, most importantly, these documents set forth the terms of the deal.
- Keep Passwords and Social Security Numbers Confidential – People too frequently give out this information on the internet. Except when communicating with a credit reporting agency, you shouldn't disclose your entire social security number to anyone on the web. Passwords are created by and only known by the user for a reason – keep it that way.
- Limit the Companies You Shop with – Consider only shopping online with US companies or only with companies from developed nations (for example, U.K., Canada, Germany, France, Israel, Japan and others). The consumer protection laws in developed nations tend to be strong and enforceable.
- Use Common Sense – Consumers will often do things on the internet they would never do if they were physically standing in a store. Resist this temptation.The internet is more dangerous than the brick and mortar world, because you never really know to whom you are providing information.
- Use Resources/Report Problems – There are many resources for information from theFederal Trade Commission ("FTC") to industry groups such aswww.lookstoogoodtobetrue.com and www.safteshopping.org. Use the resources and if it sounds too good to be true, go to www.snopes.com, where you may find it is. Do not be afraid to report problems. The FTC is often a good place to start.
More Help for Consumers on the Way?
Stein says that federal lawmakers are likely to enact more online privacy and consumer protection laws soon. He notes that president Obama signed the Restore Online Shopper's Confidence Act (ROSCA) at the end of 2010. One of the evils this addressed is the above-referenced "negative option" plan.
Negative option plans require the user to decline a service, otherwise they will be billed for it automatically. "These are like the old Columbia Records come-ons, which some of us are old enough to remember," Stein adds wryly. "You got ten records for a dollar, but at the same time were subscribed to a monthly purchase program. The offerors made it difficult for buyers to opt out of the plan, and would collect the monthly fee until they did.
"ROSCA doesn't ban negative option plans altogether," notes Stein, "but they must be clearly and conspicuously disclosed, they must require an express consent or 'yes, I agree to be billed' from the consumer, and they must be simple to stop. The Snapfish ValuePass sounds like a typical negative option plan."
Stein is keeping tabs on the progress of "do not track" online privacy legislation in the US. He notes that Europe already has much stricter rules about consumer online privacy. There, Stein says, the definition of private information is very broad, and can include essentially public information like a consumer's address.
"Do not track" legislation would give consumers the option to opt out (or make them opt-in) to online tracking by websites. Stein lays out the "anti" and "pro" cases for "do not track."
"Business is opposed to 'do not track' because it will make it harder to complete online transactions, it will impose more steps a consumer will have to take to complete a purchase." On the other hand, says Stein, "the argument for 'do not track' is that it gives consumers more control over their information."
Joining a Class Action
Think you've been duped by Snapfish or another online scam? Want to join a class action? If a class action has been filed, all persons who've been injured by the unlawful conduct are potential class members. In fact, all persons described by the class as certified by the court will be included in it, unless they choose to "opt out."
Depending on the type of class action, potential members will be notified or sought in a couple of different ways. Potential members who can be identified from transaction records may be notified by mail. This happens very often in securities fraud class actions, where shareholders who've been injured can be identified by company or brokerage records. The notice will provide instructions on what the person should do to file a claim.
In other cases where such records aren't available, the attorneys for the class will publish notices in the newspaper, online, on television or in other mass media. Persons who think they may have been injured by the conduct will be directed to contact the attorneys for the class for consultation and further instructions about filing a claim.
Of course you can opt out of must class actions and choose to go it alone. But must class actions involve only small – relatively – harm to each individual. This makes it the most efficient way to get at least some recovery for the harm. If you've only been harmed to the extent of $25, for example, filing a lawsuit individually won't make sense.
For more information on these matters, please call our office at 305 548 5020.
Twitter: www.twitter.com/yoelmolina_mo
Faceback page: www.facebook.com/lawofficeofyoelmolina
Linkedin profile: http://tinyurl.com/linkedinpagemo
Blog: http://tinyurl.com/molawblog
"Turn to us when you need help"
