7 On Your Side:Rebate Or Rip Off? - KLTV.com-Tyler, Longview, Jacksonville, Texas | ETX News

10/16/06

7 On Your Side:Rebate Or Rip Off?

When the mail arrived at Christopher Lin's house, he was surprised to find a letter with a check enclosed.

"Lots of people are always on the lookout for opportunities for getting free money. I mean, I know I am all the time," says Christopher.

The envelope said it was a rebate check and it had $3.25 inside. But no one in his family was expecting any money back.

Christopher says that was the first warning sign.

"We're kind of suspicious of anything that claims to be good of a deal. If it's too good to be true, it probably is," add Christopher.

So, Christopher started digging online.

"All I found were forums where other people were complaining about this offer," says Christopher.

The offer says once people cash the check, they become a preferred member of an agency that provides discounts at places like grocery and home improvement stores.

They also get a free credit report and an application for a new card.

One more thing: they'll be charged $89 for those privileges!!!

"It's definitely misleading in that it doesn't make the sign up for these offers the main point of the mail in the first place," says Christopher.

While it's not illegal to send money in exchange for signing up for a service, according to the Federal Trade Commission, it is illegal when the mailing implies it's a rebate from a company you've never done business with before.

The commission's James Kohm says misleading rebate checks are a growing problem.

"We've got quite a few complaints. We know people have been confused by these rebate checks that pretend to be something they're not," says Kohm.

In fact, the FTC has already sent cases to court charging two separate companies with violating federal law by sending deceptive rebate checks.

Kohm adds, "Consumers should always be concerned whenever they receive a check in the mail that they're not expecting."

As for the company that sent Christopher's check, the FTC says it cannot comment.

We contacted the company, called the Credit Card Protection Agency, to find out exactly what the rebate was for. They told us "the promotion is self explanatory."

But, the Direct Marketing Association disagrees.

We showed them the offer and their ethics committee is now contacting the company and asking them to change their practices.

"This offer maybe a little bit complex for an average consumer to understand," says Pat Kachura with Direct Marketing Association.

What should you do now if you receive one of these checks?

"When you get money in the mail, remember that nobody's giving you something for free. There's always a string attached," says Susan Grant with the National Consumers League.

Grant says the first thing you should do is read all the fine print.

"If it's not clear exactly what it is the company is offering, contact it to ask questions. And if you can't get answers to your questions, look to do your business elsewhere," Grant suggests.

 And if you think an offer is suspicious, contact the Federal Trade Commission.

"You want to help protect other people from falling prey to the same situation," says Kohm.

Christopher simply decided not to cash the check and even wrote about this offer in his blog to warn others.

"You got to be really careful."

Experts also say, if you get one of these checks, it's a good idea to check the company out with the Better Business Bureau.

When we looked into the company that sent Christopher his rebate, The Credit Card Protection Agency, we found they have an unsatisfactory record with the BBB.

Christine Nelson reporting. cnelson@kltv.com 

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