NY investigates online travel agencies for links to fee-taking discount clubsNewsBy Dennis Schaal | January 27, 2010Share This article was originally published on The New York Attorney General's Office says it is investigating and subpoenaed 22 online retailers -- including Priceline, Expedia, Hotwire, Travelocity and Orbitz -- for links to discount clubs which allegedly deceptively collect unauthorized fees from consumers.New York Attorney General Andrew Cuomo says the investigation found that retailers were linking to discount programs offered by Webloyalty, Affinion/Trilegiant and Vertrue, all of which allegedly buried in fine print the fact that consumers were authorizing the transfer of their credit or debit account information from the retailer to the discount club. The discount club then took "small and recurring charges" from the unwitting consumers, the attorney general's office says. Incidentally, Trilegiant formerly was part of Cendant.Most, if not all, of the online travel agencies subpoenaed say they are cooperating with the Attorney General's investigation, but apparently are adopting varying approaches to the issue.Priceline says it ceased offering Affinion membership to its customers in November, and Expedia.com and sister company hotels.com indicate they discontinued a relationship with Webloyalty and ceased offering these services to customers in November. Meanwhile, Expedia Inc. company Hotwire was playing it coy, only saying it was cooperating with the inquiry.Orbitz, meanwhile, maintains its ties with Webloyalty and is endeavoring to make the process more transparent.Orbitz states: "Orbitz.com has worked to ensure that consumers have been clear that they are consenting to membership in Webloyalty's discount club. We have worked hard to improve this sign-up process within our website. For instance, in addition to several points of clear pre-and-post notification during the sign-up process, Orbitz asks consumers to completely re-enter their credit card information to affirm their intention to enter the program before they sign up. Orbitz.com did receive the subpoena related to this matter and we intend to fully cooperate with the Attorney General's investigation."And Travelocity says: "We are cooperating fully with AG Cuomo's investigation and have no additional comment at this time."So, why would some of the OTAs retain ties to these discount-membership companies despite all the bad press?The membership organizations are advertising partners, providing the OTAs with ad and member-sign-up revenue.One insider says some of the more egregious practices took place among retailers outside the travel industry where, for example, consumers might have unwittingly signed up for these discount clubs merely by filling out a survey.Among the household-name retailers outside the travel industry under investigation are Barnes & Noble, Ticketmaster, 1-800 Flowers, Staples, Pizza Hut and Gamestop/EB Games.The Attorney General's Office says it reached an agreement with Fandango to end such allegedly deceptive practices.Priceline says its decision to discontinue its relationship with Affinion was unilateral decision and did not result from an agreement with Cuomo's office, although Priceline says it is fully cooperating with the probe.