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Iowa Sues To Reclaim Rebate Money

February 9, 2006

Rebate Roulette • FTC Settles With Atlanta Company Over Untimely Rebates • Iowa Sues To Reclaim Rebate Money • Senator Warns Consumers Of Rebate Traps • Consumers Playing Rebate Roulette This Holiday Season • Rebate Madness: How to Defend Yourself • Behind the Rebate Screen • First FTC Action Against Rebate Delays • Young America, Inc. --- • Rebate: Discount or Lotto Ticket

When companies advertise rebates, Iowa officials say consumers should receive that discount, no matter what.

Iowa State Treasurer Michael Fitzgerald and Attorney General Tom Miller are teaming up to obtain unclaimed rebate money they say belongs to Iowans.

Fitzgerald is the plaintiff in a lawsuit by Miller against Young America Corporation, a Minnesota "fulfillment" company that has handled rebate programs for Target, Best Buy, Hewlett-Packard, and other major retail companies.

The suit alleges that Young America has not reported unclaimed rebate checks, and instead has kept the money from rebate checks to Iowans that went uncashed for more than three years.

"First, our suit asks the court to order Young America to submit to an examination of its records by Treasurer Fitzgerald to see if the company is holding unclaimed property that rightly belongs to Iowans," Miller said.

"Second, we ask the court to order Young America to deliver any such funds to the Treasurer, so the Treasurer can begin to get the money back to Iowans."

Fitzgerald said: "Rebate checks become abandoned property under Iowa law if they go uncashed for three years. The law requires Young America and other rebate fulfillment companies to report such abandoned property to my office by June 30 each year - and to pay the reported amounts to the State Treasurer by Nov. 1," Fitzgerald added.

"Then we can go to work to find the rightful owners," said Fitzgerald, whose office runs the "Great Iowa Treasure Hunt" and other programs to connect Iowans with their unclaimed property.

The lawsuit, which was filed by Miller's office in Polk County District Court in Des Moines, alleges that Young America "has never filed a report with the Treasurer and has never paid to the Treasurer the proceeds of those uncashed rebate checks" owed to Iowa consumers.

Young America, based in Chanhassen, Minnesota, is the nation's largest rebate fulfillment company.

"We view non-compliance by the rebate fulfillment industry with unclaimed property requirements to be an industry-wide issue," Fitzgerald said. "We will soon be knocking on the doors of other rebate processors to seek compliance with our unclaimed property laws."

The lawsuit notes that Young America "took as its own revenue" uncashed checks totaling almost $43 million from January 1, 1995, to June 30, 2002. Such funds are called "slippage" - checks issued to consumers that are not cashed.

"We are asking the court to order Young America to permit the Treasurer to examine the company's records, so he can determine how much of that 'slippage' belongs to Iowans," Miller said.

"Then the Treasurer can start work to get the money back to Iowans."

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