I wrote here a couple of months ago about the shady practice among a few Internet retailers of handing off customers who accept a “special offer” to a company that charges people a monthly fee for some kind of credit monitoring service. And I argued hopefully that maybe technologists and the Internet community could generate a response to this problem:
Being a smart, informed, and aggressive consumer is each person’s responsibility if a free market is to operate well. The alternative is a negative feedback loop in which government authorities protect us, we rely on that protection and stop policing retailers. Thereby we abandon the field of consumer protection to government authorities, who—try as they might—can never do as good a job for us as we can for ourselves.
The Senate Commerce Committee is having a hearing today on “Aggressive Sales Tactics on the Internet and Their Impact on American Consumers.”
Our job here at TLF is generally to talk about policy as opinion leaders, but I tend to be a little campaign-y sometimes. When I see something I don’t like, I’ll use this platform to sound off about it.
It appears that ProFlowers.com engages in a shady practice: handing customers who accept a “special offer” from them to a company that charges people a monthly fee for what appears to be some kind of credit monitoring service. There are write-ups of varying depth and quality here, here, here, and here.
Question: Does the Internet provide enough feedback to suppress this practice? How could the e-commerce ecosystem be changed to alert people about this kind of thing ahead of time?
Being a smart, informed, and aggressive consumer is each person’s responsibility if a free market is to operate well. The alternative is a negative feedback loop in which government authorities protect us, we rely on that protection and stop policing retailers. Thereby we abandon the field of consumer protection to government authorities, who—try as they might—can never do as good a job for us as we can for ourselves.
Should we each run a “scam” search on new online businesses before we deal with them? Maybe so. But that’s a little clunky. With the popularity of Firefox plug-ins for problem solving around here, maybe one of the consumer review/complaint sites could develop a plug-in to provide people reviews of a retailer as they visit the site.
I hope that prompting a conversation around the apparent ProFlowers.com credit card ripoff scam will alert savvy shoppers to a risk of doing business with them. (For the sake of searchability, feel free to blog a little bit yourself about the apparent ProFlowers credit card ripoff scam.) Perhaps this discussion will also generate a systemic fix that preempts shady dealings of the type alleged here.
Most debates–from privacy to net neutrality–about consumer protection in Internet policy come down to the following increasingly-cliched exchange:
1. Advocate of Regulation: “The government must intervene to protect users against Companies who want to [___________] by writing new laws or regulations!”
2. Regulatory Skeptic: “Why don’t we rely on the FTC’s enforcement of End User License Agreements (EULAs), privacy policies and other terms of service (TOS) under existing law? If companies spell out their policies clearly and then are required to stick to them, those policies will become part of competition: Companies will compete for consumers by offering attractive policies the same way they compete for consumers by offering attractive products & prices.”
3. Advocate of Regulation: “That doesn’t work because nobody actually reads all that legalese! They’re impossibly dense for non-lawyers, so companies always make such agreements as broad as possible to allow them to do whatever they damn well please–and bury all the really scary provisions.”
And yet… within 12 hours of releasing its new Chrome Browser, Google removed a clause from the Chrome EULA that essentially would have Given Google the right to whatever it liked with all content posted by users anywhere online using Chrome. If this incident demonstrates anything, it’s that there are significant “market forces” at work to restrain companies from writing agreements & policies that allow them to screw consumers. Indeed, it beautifully demonstrates why the Regulatory Skeptic ultimately wins this debate with one final response:
4. Regulatory Skeptic: “It doesn’t matter if 99%+ of users never read a EULA or TOS. No matter how hard companies might try to bury some ominous provision, the relatively small number of consumer protection watchdogs who do read such provisions protect everyone else by calling attention to true areas of concern. Not every blogger who complains about something he doesn’t like in a EULA is going to make Slashdot, but overall, provisions that cross a certain line will get public attention and most companies will bend over backwards to avoid bad PR. So, the market does work to protect consumers without the need for further government regulation.”
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Posted in: Advertising & Marketing, E-Commerce Taxation & Regulation, Things that Go 'Bump' in the 'Net 
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.
