AT&T Settles With NYAG Over Deceptive Rebate Program

The New York Attorney General's Office has entered into a settlement agreement with AT&T Mobility that will require the company to pay up to $2.63 million dollars to consumers who were entitled to rebates but instead were given "rebate cards" that expired in just 120 days and were difficult to use. According to a press release from the office of Attorney General Andrew Cuomo, AT&T Mobility was fulfilling its rebate offers with rebate cards instead of checks. The ads portrayed the cards as debit but when consumers received them, they learned they could not redeem the card for cash, and the Attorney General contended the conditions and limitations of the card were not adequately disclosed in the marketing materials. According to the official press release, eligible consumers will be notified by AT&T and those who qualify will receive new rebate cards that are fully protected under the New York State Gift Card Law. The new cards may be used both to make purchases anywhere that VISA cards are accepted or to pay AT&T wireless bills. While the settlement covers only New York customers, there is currently a class action pending in the Northern District of California under that state's liberal consumer protection statutes. The parties informed the court in December they had reached a tentative settlement, but in a document filed just last week, the attorneys advised the court that there were still issues remaining to be negotiated before the California class action could be settled.

For more information regarding regulatory enforcement actions, please click here.

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