ConsumerWatchdog.org

About Rebate Scams

"I'm mad as hell and I'm not gonna take it anymore." That's how many consumers feel when they deal with the billing mistakes, overcharges, computers and other electronic devices that don't work as advertised and crummy customer service that characterizes the modern American marketplace.

Giving up, unfortunately, is what most consumers do when confronted with problems that seem too minor to spend hours trying to fix. But guess what? The unscrupulous businesses that engage in such practices are counting on that.

Injustice comes in all forms - small and large. Consumer Watchdog is taking on the merchants that mislead, those who utilize fine print traps and other tricks in order to gouge consumers.

Rebates are a good example. From cell phones and other electronics to groceries and toys, more and more sales prices are "after rebate." But there's a reason why stores and manufacturers are increasingly advertising "rebates": applying for the rebate is a complicated and difficult task. Many people either don't bother, and those that do have trouble getting their money back. Either way, consumers too often end up with no rebate - and the company gets to keep the money. Consumer Watchdog is fighting back.

As always, we welcome your complaints and concerns.

Read on to learn more about our current cases against rebate scams and other retail marketplace abuses:

• Consumer Watchdog Seeks to Correct Retail Rebate Abuses by Inphonics
  
• Consumer Watchdog Brings Suit Against Apple for Selling Defective iPod NANOs
  
• Consumer Watchdog Brings Suit Against Cingular for Deceptive Phone Rebates
  

Consumer Watchdog Seeks to Correct Retail Rebate Abuses by Inphonics

A little known Washington, D.C.-based company named "Inphonics" is the third largest reseller of cell phones and plans through various web sites, and is responsible for a vast number of rebate applications. As part of its marketing/sales programs, Inphonics offers hefty "Loyalty" rebates on cell phones, which are often offered as "free" with the purchase and activation of a phone and cell plan. Inphonics works with a rebate processing firm, Continental Promotions Group, based in Arizona.

Consumer Watchdog attorneys filed suit on behalf of affected consumers against Inphonics and Continental Promotions Group in July 2006 in federal court in D.C., alleging inordinate delays in processing rebates, and unjustified rejections of consumers' requests for rebates. Read Consumer Watchdog's complaint. (The case has since been consolidated with similar actions in a federal court in Arizona: In Re Inphonic, Inc., Wireless Phone Rebate Litigation, MDL No. 1792 - U.S. Dist Ct for the Dist. of AZ.) According to the lawsuit, the company requires that consumers file a rebate application only after a period of time has elapsed, i.e., between 120 and 150 days after purchase (when most people have long ago thrown out the box or other packaging required to receive the rebate). The suit further alleges that in order to get their rebate, consumers must submit a cell phone bill showing that the cell service is paid in full. (In some cases, the company requires the consumer to include a bill dated at least 120 days after activation, showing that the previous balance has been paid in full, at the same time that the submission must be postmarked not later than 120 days from the activation.)

Unbeknownst to consumers, switching cell phone rate plans, transferring a phone number to a different cell phone company, or returning phones results in a denial of the rebate. Failing to pay a bill on time is also grounds for revocation of the rebate. In some cases, the company will automatically charge the consumer $250 on their credit card for violation of these terms. As the suit alleges, disclosure of these and other onerous terms of the rebate is limited and most consumers are unaware of them.

CASE UPDATE:

Inphonics's practices have been under investigation by the Federal Trade Commission and the Attorney General of Washington, D.C. The Federal Trade Commission has announced a settlement with the company that addresses the agency's concerns. However, Consumer Watchdog's lawyers do not believe that that settlement addresses all of the problems described in the lawsuit.

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Consumer Watchdog Brings Suit Against Apple for Selling Defective iPod NANOs

Apple introduced the slim iPod Nano in 2005, to much fanfare, with Apple's CEO, Steve Jobs, pulling the gadget out of his pocket. Unfortunately for many consumers, the product quickly developed cracks and streaks in the screen, and severe scratching that rendered it unsightly and unreadable.

Consumer Watchdog wrote Apple in November 2005, asking it to address these issues, but Apple never responded. So, Consumer Watchdog attorneys filed suit against Apple on behalf of affected customers in February 2006 aimed at reimbursing affected customers and correcting Apple's practices of selling defective Nanos. Originally filed in San Mateo County, the suit has been consolidated with a similar suit in Los Angeles County Superior Court - iPOD Nano Cases - Sioson v. Apple Computers, Inc. JCCP No. 4469.