When Citibank offered free 4 GB iPod Minis to new customers in 2004 and 2005, the product was retailing for $249, and Citibank indirectly acknowledged the value of the product by saying they’d substitute an mp3 player of “equal or greater value” if there were fulfillment problems. There weren’t, but by the time Citibank got around to passing out the iPod Mini, it had dropped in price and a new 6 GB version was now on the market for $249. Citibank chose to take the savings and distribute the now cheaper 4-gig versions. Now there’s a class action lawsuit against Citibank in California, where it seems all class actions are born. You can read the ruling for the certification here (PDF).
(Thanks to Ronald!)
(Photo: Mike McCaffrey)
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@Corporate-Shill
I agree! It’s a cause and effect. Without the lawyers, we get no lawsuit. No lawsuit, no consumerist post. No consumerist post, no discussion. Thanks to all lawyers!!!!
Ugh, I frankly find this lawsuit quite sickening. I don’t even care if the claimants are technically in the right here according to the letter of the contract. It seems they’re in the wrong ethically, IMO. They were promised a 4Gb iPod, they got a 4Gb iPod.
@S3CT: Erm, but they claimed that the “equal or greater value” clause would only apply if there were fulfillment problems – and there weren’t. In any case, the post mentions that they “implied” the value of the iPod, not stated it directly.
Bah, without the ad it’s all speculation.
@Rectilinear Propagation: No, you get “equal or lesser value” when you’re allowing for the client to change stuff after the agreement. You need “equal or greater value” if you’re the one making the change.
So, for example, if you give a coupon for a customer at a restaurant for, say, a New York Steak, and he decides to change it for a salad, you’d be alright. If he asks for a Lobster Thermidor – erm, that’s not quite alright.
On the other hand, if you give him the same coupon but you happen to be out of steaks when he arrives, the correct thing would be to give him the lobster, since giving him the salad will be at the very least a poor customer service action which might lose you a customer, and at the very worst, an accusation of bait and switch.
Here’s the REALLY sad thing. An Ipud is worth about 26 cents. ANY Ipud
Ahh America, these people who filed this lawsuit are complete dipshits. And anyone defending there side is too.
CitiBank did exactly what they said they would do, but they’re getting sued anyway? Argh! i hate to side with a giant corporation, but I hope CitiBank wins & the idiots suing them have to pay CitiBank’s legal expenses.
So let me see. In the lawsuit the guy acknowledges that the offer was for a 4GB iPod, and if they ran out of iPods, then they’d give him some other player worth $250. But since they didn’t run out of iPods, I fail to see how the $250 comes into play at all. And if the promotion was over before the price drop, and he was just waiting for his iPod at that time, then that’s even dumber.
@Rectilinear Propagation:
“Still, I’m surprised it actually said “equal or greater value” instead of “equal or lesser value”. Isn’t that how these things usually go? They could have put in that the value wouldn’t be less that X dollars in the tiny type. “
I don’t think that’s how it works with giveaways, or else they could just not have any iPods at all, claim that they ran out, and give everyone those little $40 mp3 players off Ebay.
@spinachdip: I think you may be right on this — Citibank probably gt a GREAT price on the 4GB iPod BECAUSE it was going to drop in price. That makes sense to me, that the promotions/marketing department would make that move.
Which in turn means that Citibank’s mistake would have been assigning the value at $249, when it was $199.
Bottom line is, if they posted the value at what they paid, then they’re going to win. If they paid less and posted a higher value then it was really worth, then they are going to lose, and will end up having to pay the class the difference.
After all this, this looks pretty cut and dry to me, and it will be interesting to see what arises in discovery, and how/what Citibank says they “paid” for the item.
@Rectilinear Propagation: It’s required by law — in a promotion, you HAVE to give equal or greater value.
“Equal or lesser value” means I could give you nothing.
@Eldritch: The problem isn’t the iPod; it’s what the company agreed to do. This is a tricky one.
On the one hand, you are right. They did get an iPod and that’s what they were promised (materially). But the value of the iPod went down when the iPod got in the hands of the people.
It’d be interesting to see what would have happened if CitiBank sent the 4gb iPods as promised and then Apple came out with the upgrade.
@spinachdip: Scan over the MacRumors buying guide. Sometimes the updates happen at MacWorld, sometime they don’t. Some time there’s a year or 6 months, sometime there isn’t. A subsequent update killed the mini and replaced it with the nano—and the 4 GB nano in 2006 was $249.
They have been fools to expect to win on the Apple release schedule and product lineup roulette wheel. They might think they got lucky, but it was by no means guaranteed.
@Michael Belisle: Ooops, that typo that changes meaning. I meant to say “They would have been fools to expect….”
@shiznannigan:
As lawsuits go, this is as weak as it gets. Regardless of your take on the technicalities of the storage vs. price, fact is it was a promotion and the recipients received a product substantially similar to what was expected, ie a 4GB IPOD mini. This lawsuit is a waste of the Court’s time.
Yes, it was the same item, but what if they waited so long that mp3s became the old format, and these iPods become obsolete, then handed them out; would they have a case over the depreciation of the offer over time in that case? If so, there was still depreciation going on here, so a similar line of logic may hold here.
I’m not sure how offers like this work legally. While it seems somewhat frivolous for the consumers to bother with this, I don’t like the idea of letting big corps getting away with illegal profit mongering. If this was, in fact, a legal move, then I have no complaint with Citibank.
Hey, does anyone know if the promotion stated the value as $249, or as a $249 ARV?
Cuz’ if they stated it as an ARV, I wonder if that covers the Citi…
@gjaluvka: On the surface, the lawsuit is weak, but when looked at closely, it’s the severity of the loss that’s weak — the case may very well have merit.
What an astonishing waste of resources. A waste of a salary for a judge, transcriptionist, security, etc. And a waste of time for a jury. Something’s gotta change in our system.
There’s gotta be a correlation between ipod buyers and frivolous lawsuits.
I think people need to stop think in terms of this promotion just being an ipod. They were promised an item worth $250 when they signed up. They were delivered a different item worth $200. It doesn’t matter that they are functionally very similar. They are different items and very different values.
If I signed a contract to buy a 1200cc Harley and was delivered a 1200cc Yamaha instead I’d be upset even though the yamaha is a better bike.
If they had delivered 1st gen ipods promised at the promotion start there would be no issue. Its up to Citi to worry about fulfilling their end of the contract, not the customer.