Testimony of Prentiss Cox
Associate Professor of Clinical Law
University of Minnesota Law School
Before the United States Senate
Committee On Commerce, Science and Technology
November 17, 2009
It is with great appreciation that I thank Chairman Rockefeller for holding this hearing,
for exposing and carefully examining this problem, and for his obvious commitment to
protecting consumers from abuses in the marketplace. I have had the pleasure of working
with Senator Klobuchar, from my home state of Minnesota, on consumer protection
issues, and I know she also understands the inadequacy of current regulatory systems for
protecting consumers in today’s marketplace.
Unauthorized charges for membership clubs following consumer website purchases flow
from internet retailers selling access to the financial accounts of their customers. This
problem is part of a larger practice known as preacquired account marketing, which has
festered largely unattended for more than a decade. Today’s hearing is long overdue.
The business practices that are being examined in this hearing drain the financial
accounts of American consumers without legitimate purpose.
I first encountered the problem of unauthorized account charges resulting from
preacquired account marketing as a public attorney enforcing consumer protection laws.
Prior to joining the University of Minnesota Law School faculty in 2005, I worked as an
Assistant Attorney General and Manager of the Consumer Enforcement Division in the
Minnesota Attorney General’s Office. I was involved in the prosecution of a series of
cases against banks, mortgage companies, retailers, insurers and membership club sellers
using preacquired account marketing.
For the last few years, I have studied and written
about this practice, including its rapid growth as an internet marketing system.
These cases included publicly filed consumer protection actions by the Minnesota Attorney Gener