June 26, 2003
The Federal Trade Commission today announced it has settled an action against a New York-based Internet retailer that allegedly left over a thousand consumers in the lurch after failing to provide hundreds of thousands of dollars worth of promised cash rebates.
According to the FTC, UrbanQ and its principals told consumers who bought items from their Web site that they would receive the rebates which they called Q-bates within 12 weeks of their purchase. However, many of the Q-bates, which often ranged from 70 to 100 percent of the original purchase price, failed to arrive within the time promised, and many never showed up at all.
Under the terms of the court settlement reached with the Commission, the company and individual defendants will be prohibited from engaging in similar behavior and will pay $600,000 in consumer refunds.
A rebate is part of the deal with the consumer. Its not just bait, said Howard Beales, Director of the FTCs Bureau of Consumer Protection. You cant lure consumers with promises of cash back and then not keep your word.
UrbanQ, which began doing business in early 2000, is a Nevada limited liability company, with its principal place of business in Cedarhurst, New York. According to the FTC, in September 2000, it began selling consumer products typically apparel through its UrbanQWeb site.
On the site, the company offered consumers generous rebates, known as Q-bates, for up to 100 percent of the purchase price of the product. Buyers had 60 days to submit their Q-bates, with the company promising to pay these rebates within 12 week of their receipt. The manufacturer did not provide the rebates instead, UrbanQ would pay all rebates, which were offered on approximately 70 percent of all items sold on the Web Site.
The FTCs complaint charges UrbanQ and its principals Daniel Greenberg, majority owner Michael Konig, and Steven Krausman with violating Section 5 of the FTC Act by falsely representing that consumers who bought the companys products would receive cash rebates within 12 weeks of their order. In fact, many consumers never received any rebate at all.
The proposed order contains a judgment indicating that the defendants are liable for $789,838 in monetary relief, which will be suspended after a payment of $600,000 is made to the Commission. The FTC also will retain the right to reopen this provision if defendant UrbanQ or Greenberg are found to have misrepresented the value of their assets.
