What a joke. Scammers sell junk on TV, internet, mail, etc, rake in millions and when the FTC decides to do anything it is a fine or a slap on the wrist. The company just moves on to other scams. So they make, say, 10 million in ripping off customers and pay $330,000 to the FTC. Bottom line: over $9,000,000 profit. Not bad for a few months. The FTC is supposed to protect the consumer but it is just a toothless old whore for business.

Rebates are always a scam now it seems. I sent in a rebate for an 80Gig external HD that I got from Future Shop. I thought they scammed me good out of $80, but then, a year and a half later, I received the check. Sorry, but taking a year and a half to send me the rebate is still a scam, as far as I'm concerned. They just wanted a year and a half of interest, which should have been my interest. At least they gave me a good laugh.

@savdavid: And if their yearly profit is only $250,000 - then it's a bit more than a "slap on the wrist" - see, I can make up numbers too...

Businesses have been doing this kind of thing for years. They see fines and penalties as costs of doing business and if a proposed course of action will make a profit after paying all costs then they'll do it.

So we have "DietPillCo" selling worthless diet pills on TV. Their cost to produce is about 20 cents per bottle and they sell it for $29.95 plus S&H. After they've sold 100,000 bottles or so the law steps in and fines then $100,000 or so. No problem; pay the fine, close DietPillCo down and re-open under a different name.

It's no secret that the FTC moves slowly; it takes them a while to figure out that something is wrong and to actually do something about it. During that time, a sharp operator can rake in a bundle.

@savdavid:

I wonder if my punishment would be more than that if I robbed someone of $10.00 on the street. The punishment for white-collar crime is way too lenient.

For the record: the guys at Woot.com are awesome.

I had a rebate with Wintergreen Systems for a 19" LCD I purchased on Woot.com... after 6 months it became clear that Wintergreen wasn't honoring rebates any time soon, and Woot began providing refunds to purchasers for the amount of the rebate. Now THAT is good business practice (lets see Best Buy do that!).

Any enforcement agency or advocacy group for consumers is full of massive fail. It's been this way for years. Sucks I know.

The moral of this whole story folks is: STAY AWAY FROM REBATES!

Seriously, you can find rebate free versions of just about any product that has a rebate tacked on to it (even those notorious for it, like computers and cell phones) if you put in the time and research.

It's so worth it though because you'll completely avoid wasting time, energy and postage sending away rebates that may never be honored, even if you filled out all the paperwork correctly.

@freelunch: There reasons to hate Best Buy are legion, but rebate crap is no longer one of them; they virtually eliminated rebates starting in 2005 - more here.

I'm sorry, but the vendors in question are just stupid. I mean, WTF purchases millions of bucks worth of computer equipment from a damn one man Indiana computer store, and expects everything to go well? This was not a massive operation, the Wintergreen website (that was alive during the scams) was a frikkin joke.

I love Woot and Newegg, but surely someone at their purchasing department must have had a couple of alarm bells go off when they started buying from him?

At the end of the day, it was pure greed that drove them. At least they were honest enough to compensate consumers for their losses.

@Ayanami: Actually, some of the state AGs--Andrew Cuomo, Lisa Madigan--are pretty active, and the latter has a pretty responsive state office, too.

So Wintergreen Systems was doing what every rebate company does, only on a larger scale? It's depressing to constantly hear how subjective the law has grown to be. Stop popping pimples, deal with the acne as a whole. I'm beginning to warm to Ohio's slash and burn stance.

On a lighter note: "John Levy is a repeat offender. (The FTC calls him a recidivist, ha ha.)" Okay, then.

@AirIntake: I hear you. I was video card shopping online yesterday and I was surprised to find the card one level up from the one I was looking for at a price $20 less. Of course there was an asterisk and a "$60 mail-in rebate". Even though I *should theoretically* be able to get the card at a lower price, my gut told me that wasn't ever going to happen.

No amount of FTC posturing stops these guys, only serious jail time and seizure of assets. It may only be tens of thousands of dollars a year from this one company, but over the lifetime of the guy running this system, he will make millions illegitimately.

And blocking his individual right to run such a business will accomplish nothing as all he has to do is have a coluder start a new company under a different name. Happens all the time.

@dragonfire81:

I've done quite well with mail-in rebates. Since I started keeping track in 2003, I've collected over $20,000 (a couple-month-old copy of the excel spreadsheet I track my rebates with is here.

They can be great deals if done right - often you can stack multiple mail-in rebates, or a MIR and a coupon, and occasionally get paid to buy something. They are a bit of work, but I usually fill them out while I'm watching TV or something anyway.

Fatwallet and other sites have very good info on rebate companies - which ones are good, which ones suck, and how to get paid if you get rejected unfairly.

My general philosophy has been to stick with ones from major companies, especially ones that go through major processing houses like Parago (El Paso, TX). I can't say I've never not gotten a rebate, but the amount I haven't gotten is <5% of thousands.

@freelunch: I bought a 19" lcd monitor from PC Connection and Wintergreen never paid me. I complained to PC Connection for 3-4 months and they finally made good on it for me.

What a hassle.

"Voluntary Compliance" is an oxymoron.

FYI, if a retailer promoted a rebate from Wintergreen and you didn't get it, the retailer is obligated to pay it, as apparently Woot did for many customers.

The merchants are supposed to do due dilligence to make sure these companies can and will honor the rebates. This was the crux of an action by the FTC against CompUSA a few years ago. CompUSA kept advertising these deals from companies that weren't paying the rebates. And CompUSA kept advertising and advertising these companys and their products.

It's called "fraudulent inducement." It's a no-no.

@dragonfire81:

I think right now with the way the economy is... I would be cautious about rebates.

@savdavid: In the post, it says that amount is equal to the amount he ripped off consumers for. I'd like to see punative too, but this is still decent. However, it also says he won't be paying it, so that part's weak.

just about the only nice thing about living in Utah... If I don't get my rebate, I get to return your product.

@twophrasebark:

In the CompUSA case, they were actually continuing to promote deals from a company that had gone bankrupt and thus they knew would be unable to pay the rebates.

@freelunch:

Woot isn't awesome; they're merely following the law. When you purchase something from a reseller with a mail in rebate, the reseller often attempts to pass off fulfillment responsibility to the manufacturer.

In actuality you are entering a contract with the reseller. They are obligated to make good on the rebate if the manufacturer does not. Document everything, every step of the way. Then file a case in small claims court. Be humble and show the judge your state's Deceptive Trade Practices Act or similar. This should entitle you to 3x damages, and with any luck you get your court fees back too.

Most times the reseller will settle with you the day before the court date, because $300/hour maggot lawyers get expensive quickly (although in theory for small amounts of damages they aren't required to hire representation).