After her granddaughter was born, Melinda Voss eagerly purchased photos from to show to co-workers and friends. Several months later, the doting grandmother noticed a mysterious recurring bill for a service she never wanted.

Voss, 59, of St. Paul, is among the millions of consumers who click on Web links flaunting free gifts or cash-back offers, only to learn months later that they've unwittingly agreed to pay for a membership club. Voss didn't have to provide her credit card information to Webloyalty, the company that began charging her $12 per month for Reservation Rewards, a travel and hospitality discount service. Webloyalty received her billing information from Shutterfly Inc., which earns a finder's fee for passing along the account information.

Charging a consumer for a service without receiving credit account information directly from that person is called "pre-acquired account marketing.'' The controversial and profitable business has been around for years. But at a time when consumer protection is getting its due, the issue has caught the attention of legislators and consumer advocates who say the best way to protect people from these unwanted charges is to outlaw the practice altogether.

"The consumer is tricked into buying something that he didn't even realize he was buying," said Sen. Amy Klobuchar, D-Minn, during a Tuesday news conference. Klobuchar, who sits on the Senate Commerce Committee investigating these programs, shared details from the committee's investigation.

This is a $1.4 billion business for Affinion, Vertrue and Webloyalty, the main direct marketers engaged in this behavior, and their 450 retail partners such as, and, according to the Commerce Committee investigation. In the past decade, Web shoppers have been enrolled more than 35 million times in these membership clubs. And upwards of 90 percent of consumers have no idea they are signed up for these programs.

"If that's not fraud, I don't know what is," Klobuchar said, adding that most consumers cancel when they notice the charges.

Minnesota Attorney General Lori Swanson, like Klobuchar, has called upon the Federal Trade Commission (FTC) to ban preacquired account marketing.

"The products typically being offered through that type of marketing don't have a lot of value to the consumer,'' Swanson said. "And one of the things that the marketers know is if they point-blank asked the question 'Do you want to buy this product?' people aren't going to want to buy it." Swanson plans on introducing legislation next session to prohibit the use of rebate checks as a tool for this type of marketing.

The direct marketers argue that their programs offer great deals on tourist attractions and restaurants. If consumers would only read the fine print, they say, then shoppers would know they were being charged a monthly fee for the benefits.

But consumer advocate Prentiss Cox, a University of Minnesota law professor, said claiming "it's in the fine print" isn't an excuse.

"Fully disclosed isn't the same thing as a practice that's not abusive," said Cox, a former Minnesota assistant attorney general who testified before the Senate Commerce Committee last week.

Cox, who has been trying to bring attention to this issue for a decade, said the monthly charges often go unnoticed by consumers who are elderly, have limited understanding of financial matters or speak English as a second language.

"It's a giant sorting scheme to sort out vulnerable consumers," Cox said.

Voss figures that if it could happen to her, it could happen to anyone. After all, Voss, who works in public relations, used to write a savvy-consumer column for the Des Moines Register. "The sad part about all of this is it just makes consumers skeptical and cynical," she said.

Figuring she'd come back to purchase additional photos of her granddaughter, Voss clicked a large, blue button stamped with "Yes!" and entered her e-mail twice to receive $10 toward her next Shutterfly purchase. She never used the money.

It took Voss a few months to notice Webloyalty's $12 charge. "What $12 purchase did I make?" she thought. But after a few months of the $12 charge and a complete blank on what it could possibly be for, she called the 1-800 number associated with the charge and was struck by how the very first option on the phone menu related to billing questions. She remembers thinking, "'Boy, they must have a lot of people who want to cancel their accounts because they usually don't make it so easy. When people figure this out, the jig is up.'"

More consumer-friendly

When asked why Shutterfly partners with Webloyalty, the photo company said in a statement that it takes customer complaints seriously and requires "Webloyalty to abide by the same 100 percent satisfaction guarantee" that Shutterfly has for its own customers.

"Just hearing a few complaints about your company is a few too many," said Beth Kitchener, Webloyalty's vice president of corporate communications. She said the company is constantly updating its offers and processes to make them more consumer-friendly, pointing out the company's recent decision to require consumers to enter the last four digits of their credit card number twice to be enrolled in its membership programs. Affinion and Vertrue have also announced their intention to do the same.

Webloyalty made the change because if someone is asked for part of their credit card number they should think, "'I'm entering financial information so I'm going to be billed for something,'" Kitchener explained.

The FTC currently requires telemarketers that engage in preacquired account marketing to obtain the last few digits of the account to be charged from the consumer.

But Cox said that doesn't go far enough. He says consumers have gotten used to reciting the last four digits of their credit card number to verify their identity, so the practice doesn't say "charge me" to shoppers.

Said Klobuchar: "The best thing to do here is to have clear rules to prohibit this kind of conduct instead of just letting them play around on the edges of it, because they are going to find another way to rip us off."

Kara McGuire • 612-673-7293