Intelius founder and self-proclaimed Internet wizard Naveen Jain
Intelius is facing more scrutiny. Next Tuesday, the U.S. Senate Committee on Commerce, Science, and Transportation plans to hold a full committee hearing on "aggressive sales tactics on the Internet." The kind of dodgy tactics used by the Bellevue-based Internet company are sure to be front and center.
Last week, Committee chair John Rockefeller sent letters to Intelius and 15 other companies seeking information about their relationship with several businesses under scrutiny for so-called "post-transaction marketing." (You can see a sample letter to one of the companies here.) We explained how this works in our cover story last March. Consumers buy something cheap from Intelius--like a phone number--and unwittingly get hit with ongoing monthly fees, sometimes from the company's marketing partner, Adaptive Marketing (a subsidiary of Vertrue, one of the entities under investigation by the Senate Committee).
The Congressional spotlight follows an investigation of Intelius by state Attorney General Rob McKenna, also surrounding its post-transaction practices, and a Federal Trade Commission investigation related to laws that regulate how credit information is disseminated. That's on top of two recently-filed class action lawsuits on behalf of angry customers, one in federal court in Seattle.
It seems amazing that the company still intends to go public. But that apparently is the case, according to the company's October 19 SEC filing. But perhaps its appeal will be strengthened by affirmations like last week's "seal of approval" by TRUSTe, a company that purports to identify "trustworthy" sites that protect consumers' confidential information. (Ironic, given that Intelius passes on consumers' credit card numbers to Adaptive.) In the free-for-all that is digital commerce, obviously some people don't want to look too closely.