A $2.63 million
agreement with AT&T Mobility over a misleading and deceptive sales
promotion involving rebate offers that were fulfilled with onerous and
condition-laden rebate cards by the New York's Attorney General Andrew M. Cuomo.
AT&T is required to provide more than $2.63
million to consumers who received rebate cards from AT&T in
fulfillment of its rebate offers on cellular phones and other wireless
equipment and services.
Since 2005,
AT&T Mobility, LLC, headquartered in Atlanta, Georgia, has been
fulfilling its rebate offers with rebate cards instead of checks. These
cards were portrayed as debit cards in the amount of the rebate offer.
However, the cards were not redeemable for cash, could not be used for
cash withdrawals and expired 120 days from issuance. The Attorney
General's Office found that AT&T failed to adequately disclose the
card's conditions and limitations in its marketing materials for the
promotion. AT&T also deceived consumers with offers for "free"
products when, in fact, consumers had to pay the full price up-front
and then submit a mail-in rebate form from which they were sent the
aforementioned rebate card with its accompanying limitations.
In
addition to the $2.63 million to consumers, the Attorney General's
settlement requires AT&T to clearly disclose all the terms,
conditions and limitations of any rebate offers and cease referring to
the cards used to fulfill the rebate offers as "debit cards" in its
advertising unless the cards are redeemable for cash. The agreement
also requires AT&T to clearly disclose any conditions in marketing
and advertising materials.
Consumers
potentially eligible to receive funds will be notified by AT&T.
Qualifying consumers will receive new rebate cards that are fully
protected under the terms of the New York State Gift Card Law and which
may be used both to purchase products and services anywhere that VISA
cards are accepted, and to pay consumers' AT&T wireless bills.
AT&T
cooperated fully in the investigation. The case was handled by
Assistant Attorney General Doris K. Morin and Assistant Attorney
General-in-Charge of the Westchester Regional Office Judith C. McCarthy
with assistance from Senior Investigator John Slevin, in conjunction
with Bureau Chief for Consumer Frauds and Protection Joy Feigenbaum and
Deputy Attorney General for Economic Justice Michael Berlin.