Sen. Charles Schumer (D-NY) has asked the Federal Trade Commission to standardize rebate procedures, saying that rebate scams are created by companies whose job it is to ensure consumers have a hard time getting their money back.
In a letter to the FTC, Schumer urged an investigation of company rebate policies, and an overhaul and standardization of the rebate process.
About one half of the 400 million rebates offered to consumers each year are never redeemed because the application process is too difficult to understand, Schumer said.
He outlined ways in which consumers can make sure they get their rebates saying that rebate processing centers or fulfillment houses have complex rules, short filing times, and ask for documentation that is nearly impossible to obtain— in an effort to avoid giving the consumer’s money back, Schumer said in a statement.
“These rebates are fool’s gold,” Schumer said. “The promise of cash back quickly turns into frustration for consumers who can’t get what they were promised. The FTC needs to step in and regulate these practices immediately.”
He said rebates are “extraordinarily popular” with manufacturers because most of them go unredeemed and provide what is essentially free money to the companies.
“This is post-Christmas bait-and-switch,” he said. “People go into stores with the promise of getting money back, and months later they still haven’t seen checks.”
In his letter to the FTC, he requested that the following consumer protections be put in place:
- Companies must provide consumers at least 30 days to redeem their rebates and must fulfill the terms of the rebate within the same amount of time required of consumers but it should not exceed 60 days.
- Companies must take steps to send the rebate check in a manner which identifies the piece of mail as the expected rebate check.
- Companies must accept copies of receipts, not just originals.
- Companies cannot require consumers to write identifying information on the rebate form unless the receipt does not identify the purchased product.
- Companies offering rebates may not require information that is not necessary to process the rebate, including information other than name, address and phone number.
- Companies must provide telephone numbers or contact information for rebate inquiries so consumers are able check on the status of their rebates.
In March 2005, the FTC reached a settlement with CompUSA, Inc., requiring the computer superstore to pay for thousands of consumer rebates that a supplier failed to make good on. It was also required to overhaul its rebate program (Xtra, March 16, 2005).
In 2001, the Better Business Bureau received 964 complaints related to rebates. That number jumped to 3,641 last year, according to The Associated Press.
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