Class action filed 8/1 against Buy

CASE SUMMARY
Case No. Case Title Case Type Filing Date Category
07CC01336 KERSHENBAUM VS Buy.com INC BUSINESS TORT 08/01/2007 COMPLEX LITIGATION

Participants
Results 1 - 3 of 3 1
Name Type Assoc Start Date End Date
RICHARD M KERSHENBAUM PLAINTIFF 08/01/2007
BRODSKY & SMITH LLC PLAINTIFF ATTORNEY 1 08/01/2007
Buy.com INC DEFENDANT 08/01/2007

Huge post in need of trimming below:

PC World article gives idea of widespread nature of this issue:

Buy.com customers purchased 48,683 Connect3D products from Buy.com's Web site that were eligible for rebate. Sales of those products totaled $3.1 million. By Buy.com's estimates, if the consumers requested rebates within the allotted time,.... pay out [should be] $2.3 million in rebates.

--------------------------------**EDIT by wshawntaylor
I spoke with Matthew Gold of the FTC and he said that the quote Tom Spring used in the PCWorld article was not what he had said and any blanket statement about Buy.con not being responsible was "...erroneous".

This need national press attention:

Here is the email address for a technology writer for the Associated Press:
njesdanun@ap.org

Here are some more:
http://www.cs.umd.edu/hcil/newcomputing/journalists.shtml

Write your story to all of them - send one mass email - I already have.
--------------------------------**EDIT by wshawntaylor

SKIP CALLING, E-MAILING, BEING NICE - FILE A COMPLAINT!!! They don't want to pay these rebates unless it means a bad strike on their record!

Do the following (you can do them all today, no reason to wait):

BBB
FTC
California Attorney General

IT'S IMPORTANT THAT YOU DO ALL THREE. The departments involved (BBB, FTC, Attorneys General) all base investigations on PATTERNS OF LARGE QUANTITIES OF COMPLAINTS, so we will get a resolution if we ALL COMPLAIN!!

UPDATE 7/20

Finally some press attention. Big thank you to all those involved and PC World in taking the effort in bringing this to light.

PC World article - Company Shutdown Sparks Consumer-Rebate Horror Show

UPDATE 7/16:

Looks like this issue is being noticed. Lets keep up the good work folks and don't forget to also file a complaint with the FTC. Notice the last part of the BBB press release about no case yet pending. That is what filing with the FTC will accomplish.

Post per alesmith56.
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From: http://www.boise.bbb.org/3d.htm - thanks - Thorr

Connect 3D Busy Closing US Office as it Fails to Deliver on Rebate Offer

San Jose – July 12, 2007 – Over 350 complaints have poured into the Better Business Bureau (BBB) regarding Connect 3D’s failure to honor a rebate offer for products advertised on Buy.com. The former president of the company, whose name has been withheld for safety reasons, informed the BBB on June 28 that Connect 3D is insolvent because of a lack of payment from a major distributor. The company’s San Jose office is in the process of shutting down.

After receiving only three complaints in 2006, the company received two in March of 2007 regarding unfulfilled rebates. Nine more complaints about rebates were filed in April. When May came along, the complaint numbers grew by 56 and continued to explode with 236 in June. So far, in July there have been 77 additional complaints against the company to make up the current total of 383.

Most complainants reported purchasing a 512 MB, 1 GB or 2 GB Connect 3D 2.0 USB Drive or Secure Digital Card. While a few complainants mentioned purchasing Connect 3D products from Office Depot and Amazon.com, the vast majority of complaints stemmed from the products advertised on Buy.com. Rebates offered were any where between $20 and $50. According to complainants, the rebated items were particularly enticing because the price was advertised as “FREE” on Buy.com.

According to the terms and conditions on Buy.com, Connect 3D offered the rebate between January 30 and February 28. Rebates were to be postmarked within 30 days of the purchase date and were supposed to arrive 8-10 weeks after the rebate form was received. Some consumers reported that they had been waiting for more than 20 weeks since submitting their rebate forms and have still yet to receive a rebate check.

The last response the BBB office received from Connect 3D was on March 28. One consumer allegedly received a postcard from Connect 3D on April 19 claiming his rebate form was invalid. Many consumers commented that they attempted to contact the company via its rebate phone number, but were met with a message that allegedly stated “due to the high volume, the rebates were turned over to a rebate clearing house and that all checks should be mailed by May 30, 2007.” As of June 25, the phones and US Web site were confirmed to be inactive and reports from consumers claim that checks have not been mailed.

The BBB visited the former office of Connect 3D in San Jose on June 27 and 28 to find cubicles being torn down and many items in boxes. The Web site, www.connect3d.com, lists overseas offices as well as the San Jose office and is registered to Connect Components, headquartered in Great Britain. When asked what the connection between the overseas offices and the San Jose branch, the former president said he could not comment on any relationship between the companies.

On July 9, Buy.com emailed afflicted customers to explain the situation involving Connect 3D’s failure to honor its rebate offer. The company also issued a $10 customer care gift certificate as a sign of goodwill. Recent Federal Trade Commission (FTC) cases involving manufacturers defaulting on rebates advertised by retailers have resulted in the retailer being held liable to fulfill the rebate because it was the retailer who advertised the rebated price. No such case is pending yet.

The BBB offers these tips when dealing with rebates:

a.. Follow the instructions on the rebate form and enclose all required
documentation in the envelope when filing for a rebate.
b.. Consider sending your rebate paperwork via certified mail if you want to secure proof that you mailed your form by the required deadline.
c.. Make a copy of all paperwork to be mailed when applying for a rebate. It’s the only record a consumer will have of the transaction if anything goes wrong.
d.. Contact the company if the rebate doesn’t arrive within the time
promised.
e.. If the rebate never arrives or arrives late, file a complaint with the
BBB, FTC, or your state Attorney General.
===========================================================================

Buy.com is now sending following emails to those that have waited weeks for a resolution. They're basically saying "we're suing connect3d but don't expect any concrete results so take the $10 and get off our backs."

===========================================================================
Dear Buy.com Customer,

You recently purchased an item from Buy.com in which Connect 3D offered
a manufacturer's rebate. We regret learning that Connect 3D has
failed to honor a rebate offered to you.

Reports are circulating that Connect 3D is now insolvent and no longer
performing any business functions. We are investigating these reports.
Indeed, before allowing Connect 3D rebate forms to be posted on our
website, Buy.com took the additional steps of requiring financial
statements from Connect 3D and obtaining a contractual commitment from
Connect 3D to pay Buy.com directly for wrongly-rejected or
extensively-delayed rebates. This contractual commitment allows Buy.com to bypass the
rebate center and invoice Connect 3D directly on behalf of those affected
customers who have contacted us directly.

Buy.com has submitted demands to Connect 3D to perform on its
contractual obligations. Connect 3D has ignored those requests and has refused
to pay Buy.com for any of the Connect 3D rebates owed to our customers.
As a result, on July 6, 2007 Buy.com filed a lawsuit in Orange County
Superior Court against Connect 3D and others (including without
limitation, Connect 3D's principal officers, Marc Levaggi and Mike Walsh,
Connect 3D's distributor, Wintergreen Systems and Connect 3D's affiliated
entities) for failure to honor commitments made to Buy.com and its
customers. Litigation is unpredictable, costly and time consuming.
However, it's Buy.com's belief that Connect 3D and the other defendants in
this litigation should be required to honor your rebate.

No assurance exists that Buy.com will be successful in this litigation
or in attempting to enforce any judgment that may ultimately be
obtained.

We sincerely apologize for any hardship or inconvenience resulting from
Connect 3D's failure to honor your rebate. Buy.com wants to remain
your favored internet retailer. While we pursue this matter, please
accept the following gift certificate as an indication of our sincere
regret.

Sincerely,

Buy.com

You are the recipient of a $10 Buy.com gift certificate from Buy.com
===========================================================================

Buy.com can sue connect3d all day and won't see one red cent if they're bankrupt. So this would seem they're trying to make it look like they're on our side when in fact all they're doing is trying to shift the blame and save themselves from paying out these rebates.

Fact of the matter is there is an FTC precedent that clearly states a retailer is ultimately responsible for the rebate if 3rd party goes bankrupt. As I stated before, I urge all those affected by this rebate to file a complaint with the FTC. Once the complaints hit a critical mass I'm sure FTC and the media will take notice and facing FTC scrutiny, Buy.com will have but no choice to come clean and do the right thing.

This case is remarkably similar to CompUSA / QPS rebate fiasco some years ago. QPS went out of business and the rebate were not being paid. FTC held CompUSA accountable for the rebates and CompUSA ended up settling the case and was forced to pay all the rebates.

I would urge those affected to file a complaint with the FTC. FTC usually will not act on single complaint but if they start getting flooded with complaints against Buy.com I'm sure they will take notice. Precedent is a powerful ally when it comes to these cases.

Take a look at following FTC release regarding CompUSA settlement:

The Rebate Debate: Why Were They Late? FTC Settles Charges Against CompUSA

=====================================================
Action Is First Challenging a Retailer’s Promises for Third-Party Rebates

Under the terms of two separate consent agreements announced today, the Federal Trade Commission has settled charges against nationwide computer superstore CompUSA Inc. and the officers of computer peripherals manufacturer Q.P.S. Inc., whose products were marketed and sold by CompUSA, for allegedly failing to pay, in a timely manner, thousands of rebates for products sold under the CompUSA and QPS brands. Under the terms of the settlement with the superstore, CompUSA will pay consumers who purchased QPS products at CompUSA their due or past-due rebates, which ranged from $15 to $100 each.

Today’s case represents the first time the FTC has charged a nationwide retailer over its rebate advertising practices, including its advertising of manufacturer mail-in rebates. The administrative consent agreements announced today settle all charges against CompUSA and QPS’s principals Priti Sharma and Rajeev Sharma.

“When it comes to rebates, retailers must deliver on their promises,” said Lydia Parnes, Acting Director of the FTC’s Bureau of Consumer Protection. “The message to retailers is clear – the FTC is on the beat and will take action if you advertise manufacturers’ rebates when you know they aren’t honoring their promises.”
====================================================

Taking the "Bait" Out of Rebates

And don't forget to FILE A COMPLAINT WITH THE FTC.

Company name: Buy.com
Street address: 85 Enterprise Suite 100
Aliso Viejo, CA 92656
support@customerservice.Buy.com
877-780-2464

Here's what I wrote in my complaint:

==============================================
On 1/25/07 I received an email advertisement from Buy.com that included a Connect3D 2GB Secure Digital card for $0 after a $50 mail in rebate.

Here is the text from the email I received:

Weekly Deals

Connect3D 2GB USB Drive
FREE BUDGET SHIPPING
$50.00 Mail-in Rebate
$0 After Rebate
Buy.com price: $50.00

I purchased the item and have sent in the mail in rebate on 2/11/07. It is now 7/10/07 and I still have not received this rebate. The company involved "Connect3D" has apparently gone out of business and Buy.com is refusing to honor these rebates. I feel that the responsibility for these rebates should ultimately fall on the retailer advertising the rebate to the consumer. Please reference previous case against CompUSA per following URL:

http://www.ftc.gov/opa/2005/03/CompUSA.shtm

There are many that have been affected by this rebate as seen in the discussion forum on www.fatwallet.com. Please refer to following URLs:

http://www.fatwallet.com/forums/messageview.php?catid=74&threadid=699020

http://www.fatwallet.com/t/54/713342/

Thank you for looking into this matter and I hope you will be able to assist in getting this issue resolved for all those affected.

P.S. I like little boys.
=================================================

Message edited by: sidewinder33625 on 2007-07-18 06:35:38 CDT

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Thanks to "budster" for the following comment:

For those of you with BBB complaints that are getting closed, you need to make sure that you are disputing the outcome of the complaint. I think the only way to do this is to call the BBB at (909) 835-6064 since it doesn't seem you can dispute the outcome online after the complaint has been closed. If you don't do this, then the BBB assumes the complaint was resolved satisfactory, and this would make buy(dot)com look good on their company report.

To clarify: your complaint would still get closed, but you want it to be in a closed status but disputed, not closed and resolved.