Tuesday, July 28, 2009

Rockefeller Subpoenas Web Marketer

Senate Commerce Chairman John (Jay) Rockefeller issued his first subpoena Tuesday as head of the committee to Vertrue, Inc., for withholding information related to the company's allegedly deceptive online business practices. The subpoena requires the Norwalk, Conn. firm to produce documents that were explicitly requested by Rockefeller in May, including communications Vertrue had with business partners and credit card companies about "mystery charges" passed on to consumers as well as internal discussions regarding complaints about those unauthorized charges. The subpoena demands that Vertrue CEO Gary Johnson provide the files to the committee by Aug. 18.

Vertrue General Counsel George Thomas told Tech Daily Dose that his firm requested that Rockefeller issue the subpoena to better protect the personally identifiable information of consumers. Vertrue previously provided redacted documents that omitted individuals' names, addresses, telephone numbers and financial information. "Without a subpoena that information would not have been adequately protected in our view," he said, adding that if the contents were stolen or misappropriated Vertrue could be liable. Under the subpoena, the committee will have in its possession in a matter of days unredacted documents that include personal details and live credit card account information.

Regarding the panel's broader investigation, Vertrue maintains it has never done anything unlawful. The practices being examined by Rockefeller's staff -- including handling of so-called "pre-acquired account information" and "post-transaction sales" -- are specifically permitted by FTC laws and rules, Thomas argued. Rockefeller also issued letters to e-commerce marketing firm Webloyalty.com to get more details about the controversial business practices. Read Rockefeller's latest letter to Vertrue here and the subpoena here.

Update: A Senate Commerce aide said Vertrue requested a subpoena pertaining to the consumer complaints -- not on the larger issue of e-mail, financial documents and other internal communications. "They would like to make this look like it's a narrow issue, when the actual reason the subpoena was issued was a broader failure to cooperate in the investigation," said the aide, who accused Vertrue of "slow walking" the investigation.