Telecom accused of deceptive marketing
of ConsumerAffairsThe Federal Trade Commission has charged an Atlanta telecom company with deceptive marketing by promising consumers they would receive their rebates within eight weeks of submitting properly completed forms. In reality, tens of thousands of consumers did not receive their rebates within the time promised, and some had to wait up to a year or more for their checks, the agency said.
According to the Commission's complaint, American Telecom Services, Inc. (ATS), offered numerous rebates to consumers as part of its business as a distributor of telephones and phone services. The company has sold both traditional and Internet phones bundled with communications services.
Offering mail-in rebates ranging in value from $5 to $50 for its "Pay 'N Talk" program, ATS used third-party fulfillment houses to process and pay rebate requests received from consumers who bought its products. The FTC contends that the company misrepresented that consumers who bought eligible ATS products would receive their rebate checks within eight weeks after the company received their properly completed rebate requests.
Since 2006, the Commission alleges that tens of thousands of consumers who filled out their rebate request forms correctly and submitted them on time experienced substantial delays in receiving their rebate checks, including, in some cases, delays of a year or more. According to the complaint, the delays stemmed from ATS' inability to pay its third-party rebate fulfillment houses, as well as its refusal to pay fulfillment houses with which it had disagreements over rebate-related issues.
The proposed consent order prohibits ATS from misrepresenting the time in which any rebate will be mailed and from failing to provide any rebate within the time it specifies — or within 30 days if no time is specified in the offer. It also prohibits ATS from misrepresenting any material terms of any rebate program, including the status of the rebate or reasons for delay in providing a rebate.
The order also contains record-keeping and reporting provisions designed to ensure ATS's compliance with its terms.