This really shouldn’t come as a big surprise. But this week many legitimate websites were shown to be taking financial advantage of customers. Traditional media took notice after Michael Arrington decided to bust Facebook for allowing less than reputable advertising and consumer abuse to occur on it’s service. What I’m wondering is why the TechCrunch crew is just now report this? Many in the security field have been warning readers about this for years. I’d be amazed with all of Arrington’s industry contacts that he wasn’t aware that this type of consumer fraud was taking place on many well known web destinations. This has led me to question Michael Arrington’s motives. Was this really someone who was concerned about end users being ripped off? Or is there some financial angle not being disclosed?
While Facebook and developers who produce “content” for that service were being racked over the coals. Most people completely missed the story about other well known Internet destinations making cash from similar underhanded schemes. Hardworking people are being taken advantage of by websites that are seen as legitimate and trustworthy. I had a conversation with a Facebook user over dinner who didn’t see what the problem was as long as they didn’t click the advertisements. Only after I asked how they could do business with a company that cared less about fraud did they see my point of view. Facebook does a great public relations pitch about protecting their users while the company took a large percentage of revenue from fraudulent ads.
What frustrates me the most is no one has held any of these companies accountable for what should be considered criminal acts. Zynga the producer of Mafia Wars actually bragged about how they basically stole money from their customers from day one. Even after making this public statement they were able to get investors to give them $15.18 million more in venture capital. So I guess after everyone made lame apologies all is forgiven. Who cares how bad consumers where taken advantage of. Lets not be concerned about the business practices of these corporations. They have shown they can make profits. So lets invest in them and rip off others. Isn’t this how most of the world got into the current financial mess? Buying into investment scams.
The online world really isn’t different than offline business. Television still makes millions a year from fraudulent advertising and products. Currently online fraud is being handled with the same blind eye. Those who are supposed to protect consumers aren’t doing a very good job. The reality is punishment won’t be handed down. Once again customers will be given the short end of the stick. There is a lawsuit being brought against Facebook. It would be interesting to see what it cost them to defend themselves versus the profits they made from fraud. I’d venture a guess that no matter how legal matters go they will come out ahead.
The Federal Trade Commission ( FTC ) supposedly is looking into this mess. That will most likely lead to a slap on the wrist fine and a warning to play nice in the future. This is exactly how most of the television advertising cases have been handled. So my opinion is there really is no consumer protection in this country. Do to the fact that companies that commit fraud are allowed to do so time and time again. Rarely do any of these cases end up providing true relief to consumers.
While all the online companies involved have made public apologizes for robbing customers. None of them have offered to give these people their money back. No CEO is selling their home or car to payback those they basically stole from. At this point it doesn’t look like anyone is going to hold them accountable for restitution. In one case it would seem venture capitalist are actually rewarding Zynga for abusing their user base. I’m sure all the Mafia Wars lovers will still play the game. Even though the company has run a less than reputable business. I’ve not seen any major Facebook backlash. So I guess consumers are more than happy to have their hard earned money stolen from them using advertising scams.
If Michael Arrington is truly concerned about online business being done honestly. Then why is he no longer on his high horse demanding that those involved be held truly accountable? Why has he seemed to accept the usual lame excuses and apologizes then moved on?
To be fair the quote below will show that Facebook isn’t the only one taking consumers for a ride. For the record a few of the companies listed below I am affiliated with. I’ve used those companies services as well. I have only done business with four of those listed.
The government says the investigation shows that Webloyalty, Affinion, and Vertrue “trick” consumers into entering their e-mail address just before they complete purchases at sites such as Orbitz, Priceline, Buy.com, 1-800 Flowers, Continental Airlines, Fandango, and Classmates.com.
I do have a Facebook account which I rarely use. I’ve never clicked any ads or played games on the site. Personally all the Mafia Wars addicts annoy me. To me it seems as if Zynga and others used Mafia style scams to defraud consumers.