FTC Sues Indiana Company For Failing To Honor Rebates

The Federal Trade Commission has charged Wintergreen Systems, an Indiana-based electronics reseller owned by John Levy, with failing to honor mail-in-rebate offers for thousands of customers. The FTC’s conditions for settling the lawsuit require Levy and his company to “be barred from any involvement in the development, marketing, fulfillment, or funding of any rebate program.” There’s also a $330,000 judgment, which the company will not have to pay (more on that below). Both Wintergreen Systems and its parent company, Market Development Specialists (MDS), resold electronics through companies like Office Depot, PC Connection, Buy.com, PCMall, and Woot.com.

Even for rebate companies, Wintergreen Systems/MDS pulled some pretty amazing stunts.

Some consumers who bought MDS’s products and applied for rebates, however, found they were in for a long wait – in some cases up to two years – to get their money. In other cases, the defendants never mailed rebate checks to consumers who bought the advertised products, and while consumers did receive rebate checks, thousands of payments were delayed up to 10 weeks or longer.

John Levy is a repeat offender. (The FTC calls him a recidivist, ha ha.) In April 2006, he agreed to “voluntary compliance with the State of Indiana related to his rebate practices,” but clearly that didn’t take. That’s why the FTC wants him banned permanently from engaging in any business practice that offers any sort of compensation in exchange for making a purchase.

The $330,000 judgment is supposed to cover the total value of the rebates the company never fulfilled, but as Levy has demonstrated an inability to pay, the FTC is suspending it. They say if they discover he’s misrepresented his financial situation the judgment will be enforced, but frankly we think they should just liquidate his businesses entirely, and then garnish his checks until the judgment is paid off.

“FTC Charges Indiana Firm with Failing to Live Up to Rebate Promises” [FTC.gov]
“US FTC Accuses Reseller of Offering Bogus Rebates” [CIO]