Credit-Card Cops

In 2009, Yaron Samid's wife bought concert tickets on ticketmaster.com. On the confirmation page, she clicked a link offering a discount on her next purchase. Six months and approximately $80 later, Samid realized that his wife had also unwittingly signed up for a monthly coupon service from Webloyalty, a company whose controversial tactics have drawn the attention of the U.S. Senate and consumer watchdog forums such as Ripoff Report. (A Webloyalty spokesman says its enrollment process "has been enhanced considerably" since 2009.)

Samid, 38, got to wondering: How can banks and credit-card companies invest so much time and money in spotting obvious fraud but miss what he calls "gray merchants" like Webloyalty, who obey laws but elicit annoyed surprise when they show up on credit-card bills? Samid left his job at Pando Networks, an online video distributor, and hooked up with Raphael Ouzan, a 23-year-old computer whiz who had just finished five years in the Israeli military's cyber squadron.