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House Clears Bills Aimed At Deceptive Online Tactics, 'Spoofing' House Clears Bills Aimed At Deceptive Online Tactics, 'Spoofing'

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Congress

House Clears Bills Aimed At Deceptive Online Tactics, 'Spoofing'

December 15, 2010

The House cleared two technology-related bills Wednesday including one that aims to crack down on firms that engage in deceptive online marketing tactics.

By voice vote, the House passed a Senate bill known as the Restore Online Shoppers' Confidence Act. It would prohibit companies from using misleading post-transaction advertisements and require them to clearly disclose the terms of their offers to consumers and obtain credit and debit card information directly from a consumer purchasing the service or product. It would bar online retailers and other websites from passing on consumers credit, debit or other billing information to third-party sellers.

The legislation, offered by Senate Commerce Chairman John (Jay) Rockefeller, D-W.Va., emerged from a Commerce Committee investigation into aggressive online marketing tactics by three firms in particular, Affinion, Vertrue, and Webloyalty.

The committee found that many consumers were deceptively lured to sign up for services offered by these third-party firms with an offer for a discount or reward during the checkout process for an unrelated product or service offered by their online retail partners. As part of their partnerships with the online retail sites, the credit or debit card information was passed onto the third-party firms offering the club memberships who then often billed consumers monthly for services many say they did not use or seek.

"This is a victory for American consumers," Rockefeller said in a statement. "This legislation provides new standards that make sure businesses can't bill online shoppers for services they did not want to buy."

The House also cleared another Senate bill by voice vote that would place new restrictions on caller identification "spoofing," which involves changing the number or name that appears on caller i.d during a phone call.

The legislation would ban the use of the technology for the intention to "defraud, cause harm, or wrongfully obtain anything of value." Supporters say the technology used to deceive a caller's true identity is easily found on the Internet and is being used by scam artists for identity theft and other crimes and in some cases to cause physical harm.

"What disturbs me is how easy it is to carry out caller i.d. fraud," Rep. Eliot Engel, D-N.Y., who sponsored the House version of the bill, said Wednesday during floor debate on the Senate bill.

The bill's supporters note there are some legitimate uses for the technology. Domestic abuse shelters sometimes use the technology to conceal their identity to protect abuse victims they shelter. The bill would protect use of the technology in such cases and for other "legitimate business practices," according to Rep. Cliff Stearns, R-Fla.

Both bills will now be sent to the president for his signature.

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