Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Unfair trade practices suit against GameStop reinstated

Reprints
Unfair trade practices suit against GameStop reinstated

A federal appeals court has reinstated unfair trade practices charges against a discount savings website and an online game provider, charging they had led an unwitting minor to join the discount site’s monthly membership program.

“L.S.,” who was a minor at the time, bought a game from the website GameStop.com, operated by Grapevine, Texas-based GameStop Corp., in 2009, according to Tuesday’s ruling by the 2nd U.S. Circuit Court of Appeals in New York in L.S. et al. v. Webloyalty.com Inc., Visa Inc., GameStop Corp., Amazon.com Inc.

While making his purchase, L.S. alleged he unwittingly registered for Stamford, Connecticut-based Webloyalty’s “shopper discount” program by entering his personal information on a web page integrated into the GameStop checkout process. The Webloyalty enrollment page advertised a $20 GameStop coupon.

After a 30-day free trial period elapsed, Webloyalty began deleting $12 monthly membership fees from L.S.’ debit card account. L.S. and his parents filed suit in a putative class action, charging fraud and violations of the Electronic Funds Transfer Act and the Connecticut Unfair Trade Practices Act. The U.S. District Court in New Haven, Connecticut dismissed the case.

A three-judge appeals court panel unanimously reinstated the unfair trade practices charges against Webloyalty and GameStop. “Appellant alleges not only that Webloyalty and GameStop had designed the enrollment page to deceive GameStop customer into enrolling in Webloyalty’s membership program,” but also that they used the information provided “to convey his personal financial information without his direct knowledge and utilized his free-to-pay conversion to move him from the free trial period into the paid membership program without his consent,” said the ruling.

In addition, because he allegedly never received the promised coupon, his underlying contention is “he was effectively the victim of a coordinated bait and switch,” which is “sufficient to frame his claim that Webloyalty and GameStop’s actions were ‘unfair and deceptive’” in violation of the unfair practices act, said the ruling.

The appeals panel also reinstated the Electronic Funds Transfer Act charge against Webloyalty because it allegedly failed to provide L.S. with a copy of his funds transfer authorization. The case was remanded to the District Court for further proceedings.