The settlement is one of the first times the FTC has challenged companies for unfairness in late rebates, according to the agency. The FTC issued a release Monday announcing that it had settled with Philips on complaints that the consumer electronics maker had essentially taken longer to send rebates to consumers than it had promised.
Between January 2001 and January 2002, Philips promised a rebate delivery time of eight weeks but extended the time to up to six months. The FTC estimated that more than 50,000 consumers of Philips products were affected. The rebates were for $40 with the purchase of a Philips CD-Rewritable Drive, model PCRW804, and a $100 mail-in rebate on Philips monitors.
"Some companies are quick to offer attractive rebates, but are slow to send them out and often make them so difficult to redeem that consumers simply give up," said J. Howard Beales III, director of the FTC's Bureau of Consumer Protection.
Philips eventually paid all the rebates, said Terry Fassburg, vice president of corporate communications with Philips Electronics North America.
"We changed fulfillment houses midway through the rebate program and that caused the fulfillment problem," Fassburg said. He declined to identify the fulfillment firms.