September 14, 2006, 12:00 AM

Webloyalty.com, Fandango say lawsuit has no merit

Webloyalty.com and the operator of Fandango.com say they will vigorously fight a lawsuit that accuses them of engaging in a scheme in which Fandango customers were enrolled in Webloyalty’s Reservation Rewards program without their knowledge.

Paul Demery

Managing Editor, B2B E-commerce

 

Webloyalty.com Inc. and Fandango Inc., operator of Fandango.com, say they will vigorously fight a class action lawsuit that accuses them of engaging in a scheme in which Fandango customers were enrolled in Webloyalty’s Reservation Rewards program without their knowledge.

The suit alleges that the customers’ credit card information was forwarded to Webloyalty during the checkout process when shoppers submitted their e-mail address to get a $10 gift voucher for their next Fandango purchases. Webloyalty allegedly began charging customers a $10 monthly fee for membership in the discount club. Fandango received a fee for each customer that signed up for the club, the suit charges.

Webloyalty said the suit-filed in U.S. District Court for the District of Massachusetts-is without merit. “The lawsuit is frivolous,” Rick Fernandes, CEO and co-founder, said in a statement. “It completely misrepresents the manner in which Webloyalty.com conducts its business. We intend to vigorously defend ourselves and expect to prevail.”

A spokeswoman declined further comment, saying only “We wouldn’t have 1.6 million subscribers if that was how we conducted our business.”

Fandango.com also says the allegations are completely without merit but wouldn’t comment on specifics.

The suit alleges violations of the Electronic Communications Privacy Act, unfair and deceptive acts and practices, unjust enrichment, invasion of privacy, and civil theft.

The suit was filed by Fandango customer Joe W. Kuefler on behalf of a yet-to be-determined number of customers who were allegedly surreptitiously enrolled in Webloyalty programs after making purchases at various online retailers. It asks for damages of $10,000 or $100 a day for each day of violation for each plaintiff, plus treble damages.

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