CompUSA settles government's rebates complaint

Friday, March 11th 2005, 1:28 pm

By: News On 6

WASHINGTON (AP) _ The nation's leading computer retailer, CompUSA Inc., has agreed to settle a government complaint charging the company with deceiving consumers who bought computer products but failed to receive promised cash rebates from $15 to $100 each, the Federal Trade Commission said Friday.

The regulatory agency ordered Dallas-based CompUSA to overhaul its rebate programs to guarantee consumers will receive payments when they were promised. It also required CompUSA for the next 20 years to ensure all manufacturers of products sold in its stores pay rebates promptly.

Retailers often advertise computer equipment for remarkably low prices adjusted for rebates, knowing that only a fraction of consumers apply for such payments.

The FTC's settlement also made CompUSA responsible for unpaid rebates on behalf of one of its manufacturers, QPS Inc., which went out of business but made CD drives and other products sold in CompUSA stores.

Court papers did not indicate how much money or how many customers might be involved. The settlement required rebate payments for any eligible consumers that CompUSA can identify through its records, and for any eligible buyers who contact CompUSA or the FTC over the next 75 days.

A spokeswoman for CompUSA did not return a telephone call or e-mail inquiry from The Associated Press.

The FTC said that CompUSA falsely represented to customers who bought QPS products that rebates would be paid within six to eight weeks, but it said some customers waited up to six months or never received money. It also accused CompUSA of continuing to advertise QPS rebates despite knowing about these serious delays, up until QPS filed for bankruptcy protection in August 2002.

The FTC said CompUSA also inappropriately delayed rebate payments on its own branded products.