A Senate panel starts probe into Intelius-like social gaming & e-marketing scams

 On Tuesday November 17 the U.S. Senate Committee on Commerce, Science, and Transportation is holding full committee hearing on Aggressive Sales Tactics on the Internet and their Impact on American Consumers. This implies an investigation into the practices of marketing offers like those advertised by the online people search company Intelius which also have a lot of similarities with the scams practiced by popular social games like Farmville.

The hearing is an expanding of a committee probe into the marketing practices of a number of firms that supply these offers to partners. Last week sixteen companies conducting sales on the Internet were served with the letters requesting information about their relationships with the three marketing companies being investigated by the panel – Vertrue, Webloyalty and Affinion.

These companies that were required to report to the committee include 1-800-FLOWERS.com, AirTran Holdings Inc. (AAI), Classmates Online Inc., Continental Airlines Inc. ( CAL), FTD, Fandango Inc., Hotwire Inc., Intelius Inc., MovieTickets.com Inc., Orbitz, Pizza Hut, priceline.com, Redcats USA, Shutterfly Inc. (SFLY), US Airways Group Inc. (LCC) and Vistaprint USA Inc.

The principle underlying the scam practices of these marketing companies was explained by the TechCrunch blog. It says that immediately after an ecommerce transaction takes place on such websites customers are offered to take a survey and/or get a partial rebate on their purchase. Surely, many users fall victim to these tricks and click yes which results in that their credit card information is transferred to the ecommerce company and the user begins a difficult-to-terminate subscription to a worthless service. These scam tricks were peculiar feature of Intelius service that was much criticized and complained of last year.

According to expert estimates such ecommerce websites which use these types of offers can get CPMs for the ads ranging from $2,000 – $2,500.