Visa, MasterCard, and American Express are being criticized over allowing shady companies to charge their customers with hidden fees from misleading offers on hundreds of seemingly reputable e-commerce sites. Companies like Affinion, Vertrue, and Webloyalty pay websites such as classmates.com, buy.com, and hotels.com millions of dollars to host misleading offers which they then use for their own profit. By the Senate’s count, these companies have already made over $1.5 billion from these types of scams. An example of this is classmates.com being payed $70 million for hosting such offers on their websites
People such as Harvard Business School Professor Ben Edelman and the Senate say that the credit card companies should be responsible for protecting their customers from these sorts of companies and should not even accept charges from these companies. But since the credit card companies make money from every transaction that takes place, they are satisfied with just making these shady companies give refunds back to angry customers, creating more business for themselves.
“They’re kind of caught in the middle… On the one hand, they make money from every transaction. And though the disputed transactions are a pain for them, they charge for their work cleaning up the disputes. So they’re ambivalent” says Harvard Business School professor Ben Edelman.
Ben Edelman argues that the best thing for the credit card companies to do in the long run is to block the shady deals from ever taking place in the first place and to keep their user’s trust and belief that using credit cards is safe.