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Webloyalty -- In re Webloyalty.com, Inc. Marketing and Sales Practices Litigation

Court: United States District Court for the District of Massachusetts
Case No.:
MDL No. 1820

Wexler Wallace served as Co-Lead Counsel in this consumer multidistrict litigation concerning deceptive Internet marketing and selling strategies, unauthorized charges on consumers’ credit cards and non-cancellation of memberships.  Consumers became enrolled in Webloyalty’s programs in the course of transactions for other online purchases, typically through “pop-up” advertisements.  The Honorable Joseph L. Tauro approved an unprecedented nationwide settlement that, among other things, allowed consumers to recover up to 100% of unauthorized charges for enrollment in any Webloyalty membership program.

In November 2006, Wexler Wallace filed a nationwide class action complaint alleging that Webloyalty.com, in association with its web retail partners, unlawfully obtained consumers’ confidential billing information and used this information to sell sham, fee-based membership programs, including one commonly known as “Reservations Rewards.” Reservation Rewards is a membership program that purports to provide discounts on dining and tourist attractions, along with so-called “travel protection” such as roadside assistance, hotel overbooking insurance and baggage insurance.

Wexler Wallace alleged that Webloyalty.com charged many consumers for memberships in the Reservation Rewards program without authorization. Consumers reported that they were mislead by deceptive pop-up screens or advertisements presented during the check-out phase of an on-line purchase, often in the form of a coupon for an amount off a next purchase. Consumers complained that the pop-up or advertisement failed to sufficiently warn that by signing up for the coupon the consumer was also enrolling in a Reservation Rewards program with a recurring monthly charge of $9 to $11.

Consumers often were first alerted to the membership only when they spotted a charge on their credit card bill from WLI*RESERVATION REWARDS.

On July 14, 2009, the Honorable Joseph L. Tauro, United States District Court Judge for the District of Massachusetts, entered an order granting final approval of a nationwide class action settlement, resolving the litigation. The Settlement, in part, allowed consumers to recover up to 100% of unauthorized charges for enrollment in a Webloyalty Membership Program(s).  The settlement also required significant changes to disclosures made on Webloyalty Enrollment Pages and to post-enrollment notifications regarding Program enrollment and membership fees. The Court’s Order became effective on August 14, 2009.

To view the settlement agreement, click here.