Britain's Consumers Trust Files for Ch. 11
Tuesday, December 6th 2005, 10:46 am
By: News On 6
WASHINGTON (AP) _ The Consumers Trust, which has been accused of operating a fraudulent rebate scheme, has filed for Chapter 11 protection in U.S. Bankruptcy Court in Manhattan.
The British company, which operated in the United States and Canada, listed assets of about $9.4 million and debts of about $163.7 million.
In February, the Missouri attorney general sued Consumers Trust and its affiliate Eurofinance SA of operating a fraudulent and deceptive cashback voucher system.
Consumers Trust marketed the voucher program to merchants as a way to increase sales. The Missouri suit charged that the program's qualifications made it almost impossible for consumers to get a rebate.
Under the program, consumers got vouchers when they purchased expensive items, such as hot tubs, cars and swimming pools, with the promise that they'd get all or most of their money back in three years. Merchants paid 15 percent of the face value of the vouchers to bank accounts controlled by Consumers Trust.
According to court papers filed by the attorney general's office, the rebate program took in $24 million but has paid out less than $200,000 since 2001. More than $162 million was spent by U.S. consumers who relied on the rebate.
In September, the company settled with the Missouri attorney general's office for $1.85 million, court papers said. Consumers Trust is also being sued by the Oklahoma attorney general and individuals in at least 10 states.
Consumers Trust, with offices in Harrow, England, administered the voucher scheme on behalf of Eurofinance, owner of the cash voucher program. Eurofinance, based in the British Virgin Islands, is run by Adrian Roman.
Consumers Trust, which is under receivership in Britain, also plans to file for insolvency in Canada, court papers said.