Hi everyone! May will leave you thunderstuck with a tornadic supercell of damaging winds bringing you the infamous InPhonic rebate scam; the owner of Day Online Solutions is discovered, but can we trust absoluterewards? ConsumerGain requirements updated; new non-referral I-Deal links, and more! Let's go, we're gonna get wet...
It's time to share my findings on InPhonic, David Steinberg's former cell phone service. When insidious plans are suspect, the inner workings of a company are fully examined. Normally I act alone while investigating, however, I canvassed the indirect dealings of a rebate program with someone who granted me with their wealth of knowledge. Both of us, and a personal friend, knew something wasn't right. You will see history repeat itself during my exposition, and you'll read complaints from InPhonic's customers. If 70 pages of remonstrance doesn't speak volumes, then what will? Sources for this crucial information will be posted for all to see. Please read on...
Part 1. The rumble and shake of a faltering enterprise
"InPhonic, a business that sells wireless phones and service plans to customers throughout the country, has settled with the District of Columbia attorney general after thousands of complaints from consumers spurred the office to take action.
InPhonic sells popular phones and wireless services, such as Verizon Wireless, Cingular, T-Mobile and Sprint through its retail websites, Liberty Wireless and Firefly. The websites sell the merchandise at unusually low prices by offering large rebates.
The catch is that the rebate terms and conditions are confusing and even when they are met, many consumers say they still never receive those rebates.
ConsumerAffairs.com has received 165 complaints from consumers who thought they found excellent deals from InPhonic.
"I purchased a LG 5225 phone through www.libertywireless.com with the offer of a $100 rebate," Henry of Providence, R.I. wrote.
"I mailed the rebate form within 120 days of activation and my liberty wireless account remained current and active for 180 days since activation. I fulfilled all the obligations of the rebate contract. The activation date was 9/15/05 and the rebate form was mailed within the month of September. The rebate was promised within 4-6 weeks after 180 days of activation. Despite numerous inquiries, I still have not received the check as of now (9/21/06)," he said.
With 3,922 complaints logged against the company through the Better Business Bureau and the D.C attorney general's office, D.C. sued InPhonic in June 2006. Last week, the acting attorney general, Linda Singer, settled with the company.
Under the terms of the settlement, InPhonic must pay $100,000 to the District and make restitution to about 9,000 customers nationwide.
Two categories of consumers will be eligible for restitution payments:
(1) those who complained to either a government agency or a Better Business Bureau ("BBB"), anywhere in the United States, by February 15, 2007;
(2) those whose rebates were denied by InPhonic for any of the following four reasons -- the consumer failed to provide the "Guide to Wireless Service"; the consumer failed to provide a carrier invoice with a bill date or failed to provide an order number on their rebate submission; or the consumer's rebate submission was missing customer information.
There's no word yet on what the restitution exactly is because Singer's office is still gathering complaints, Traci Hughes, Singer's spokeswoman said.
Consumers who meet the above criteria can call Singer's complaint hotline in the next five months to add their names to the list of people who can receive restitution. That number is: (202) 442-9828 begin_of_the_skype_highlighting (202) 442-9828 end_of_the_skype_highlighting.
InPhonic published a two paragraph press release in response to the settlement in which David Steinberg, the company's chairman and CEO says:
"We are pleased to put this matter behind us. We have had a great working dialogue with the Attorney General's Office, and we thank the Attorney General and her staff for their fairness and cooperation in closing this matter. InPhonic has made several enhancements to our customer experience and we continue to improve communication relating to the rebate process. Over the last year, InPhonic has engaged a new third-party rebate provider, significantly expanded our rebate customer service team internally and improved our rebate processes to ensure a positive experience for our customers."
There are no specifics on the "enhancements" Steinberg refers to and Inphonic did not return three phone calls from ConsumerAffairs.com seeking clarification."
When reading Steinberg's press release, it felt like he had to say that to save his company's reputation. So I decided to dig deeper into this, and my oh my the discoveries I made. It appears Elvis left the building...
"InPhonic Inc.'s chief executive, David Steinberg, is stepping aside to let President Andy Zeinfeld take the reins.
Zeinfeld, who has been with the company since April 2006 after 28 years at RadioShack Corp., will take the helm Oct. 1. Founder Steinberg will continue to chair the board and advise the D.C.-based company on its strategies.
Steinberg's resignation as chief executive comes amid other changes, including a new CFO and an agreement with D.C.-based Web-based mobile phone shop Wirefly, as InPhonic tries to reverse its losses.
In its most recent earnings statement, InPhonic said it lost $41 million in the second quarter ended June 30, compared with $9 million in the year-ago quarter. Second-quarter revenue dropped to $79 million from $92 million a year ago.
The company's new strategy includes teaming up with Miami-based Brightstar Corp.
InPhonic sold its distribution and inventory assets to Brightstar, which will be InPhonic's exclusive provider of wireless handsets, SIM cards and accessories. InPhonic will exclusively activate accounts online for Brightstar's existing consumer businesses.
Brightstar, which has 11,000 points of sale in the U.S., spent $5 million on 925,000 restricted shares of InPhonic.
The companies expect to complete the deal Sept. 30.
In July, InPhonic hired Kenneth Schwarz as its new CFO. He previously worked for Chantilly-based Intersections Inc.
InPhonic (NASDAQ: INPC) restated its earnings for the first, second and third quarters of 2006, cutting $15.6 million from sales for the three quarters."
Now you're thinking, "What's wrong with that? He settled, and all is well in the world." Him stepping down isn't a problem, it's the timing that is. Too perfect that he resigns 3 months prior to a SECOND rebate scam by yours truly, InPhonic. I liken it to an ex convict fleeing to Mexico. Why run unless you're guilty? In December of 2007, InPhonic dodges monies owed to consumers by going bankrupt. The full story...
Part 2. InPhonic is no longer sovereign in the land of cell phones after losing it's king ruler
"InPhonic, a reseller of wireless services based in the District, may be leaving some of its customers out in the cold for a second time.
The company's sale to a Philadelphia private-equity firm and its bankruptcy filing mean that it is less likely to repay hundreds of customers under a settlement with the D.C. attorney general's office over allegations of deceptive rebate practices.
The sale and bankruptcy filing also call into question the fate of a class-action lawsuit against the company over the same rebate practices. The lawsuit is pending in U.S. District Court in the District of Columbia.
"The company has decided to use the bankruptcy laws to avoid paying back the consumers it scammed," said Harvey Rosenfield, a lawyer with the Foundation for Taxpayer and Consumer Rights in Los Angeles and who is involved in the class-action lawsuit.
InPhonic spokesman Tripp Donnelly said he would not comment on the class-action suit or the settlement with the attorney general's office because the matters are pending in court.
InPhonic sells cellphones made by Motorola, Samsung Electronics and other major companies, as well as wireless plans from carriers including Verizon Wireless, Cingular Wireless and T-Mobile USA, through several Web sites. David Steinberg started the company out of his Bethesda home in 1999 and attracted the support of venture capitalists such as former Apple chief executive John Sculley. Steinberg stepped aside in October and was replaced by former Radio Shack executive Andy Zeinfeld.
The company's troubles date to last year, when at least four class-action lawsuits were filed in three states against the company over its rebate practices. The cases were consolidated and are before U.S. District Judge Ellen Segal Huvelle.
Next in line to sue InPhonic was the D.C. attorney general's office, acting in response to more than 2,000 consumer complaints filed against InPhonic with the local chapter of the Better Business Bureau.
The office accused the company of making it "difficult or impossible" for customers to obtain rebates and of not fully disclosing its rebate policies. For example, the company told customers who wanted rebates to submit a cellphone bill that was at least 120 days old as proof that they had made payments. But the papers had to be postmarked within 120 days of when the service began. When customers called InPhonic to complain, the company wasn't responsive.
InPhonic settled with the D.C. attorney general in November 2006 and agreed to change its advertising and to pay customers who should have gotten rebates. At the time, Donnelly said the company was reducing its reliance on rebates.
The restitution program was only half complete when the company filed for bankruptcy protection last month, according to Bennett Rushkoff, chief of the consumer and trade protection section of the attorney general's office.
In April, the Federal Trade Commission ordered InPhonic to pay customers it owed rebates and to fully disclose the terms of rebates. Matthew Gold, a lawyer in the FTC's San Francisco office, said the order is not affected by the bankruptcy filing because the company had to comply within 75 days.
Also in April, InPhonic announced that it would restate its earnings for two quarters in 2006, increasing its loss for the year by $5 million to $7 million and bringing the total loss to $17 million. Company officials blamed inexperienced accounting staff for incorrectly reporting revenue from wireless carriers.
In October, InPhonic put itself up for sale and quickly found a buyer, Versa Capital Management, a private-equity firm in Philadelphia. To help the deal go forward, InPhonic filed for Chapter 11 bankruptcy protection Nov. 8. in Delaware. It listed assets of $120.9 million and debt of $179.4 million. The sale to Versa was approved by the bankruptcy court Dec. 18.
"Rebate claims are among the many items still to be adjudicated in the ongoing bankruptcy process of the old company, none of which are related to the new company," a spokesman for Versa said. "The new company has not and will not engage in any of the rebate programs which were at issue for InPhonic."
As for the restitution program set up by the D.C. attorney general's office, Thomas Califano, a lawyer with DLA Piper who was involved in the sale, said the District will have to file a claim with the bankruptcy court.
Since InPhonic filed for Chapter 11, Rushkoff said, he has not been optimistic about salvaging the restitution program. Now that the sale has been approved, he said, he may look into restarting it.
InPhonic is also expected to try to get out of the class-action lawsuit. But lawyers representing customers want to continue the case and expand it to include Steinberg and other former executives who they allege made millions off the deceptive rebate practices.
"We want them to know we're coming for them," said Kevin Roddy, a lead lawyer in the class-action suit.
A few unhappy customers have decided to skip the lawyers and sign up as creditors themselves.
Daniel Vanderpriem of Rancho Mirage, Calif., filed a claim for $50 for one of two rebates that he never obtained after he bought a cellphone in February. The phone was supposed to be free if he mailed in rebate forms. He sent in the necessary paperwork twice, but the rebates never came.
In September, InPhonic sent him one rebate. It was postmarked the day after he called to tell the company's legal office that he had filed a complaint with California Attorney General Jerry Brown. The experience "has taught me never to buy anything else with a rebate," Vanderpriem said."
Part 3. A reflection on the ruins of InPhonic, and a word of warning
Geez, he pulled a Brandarama before purchasing the assets! This should be taken as a warning for those who have given thought to Caivis as their gift program functions as a "cash back certificate", aka rebate program. If the same guy behind these operations has a full-fledged gift program, then flee! I'm sure Steinberg can give you lovely hotel recommendations for Mexico as well. j.k Jokes aside, this shouldn't be taken lightly. It's fraud.
Not sure what's more sickening... Reading everything above, or this paragraph:
"Each February, Inphonic CEO David A. Steinberg holds a poker party for his top executives at Washington, D.C.'s Historic George Town Club. As a reward for their long hours, his executives are treated to scotch and cigars as they bluff and bet with members of InPhonic's A-list board of directors -- top venture capitalists, famous politicians, and John Sculley, the well-known former CEO of Apple and Pepsi. The tradition feels bigtime and established, the kind of ritual befitting a company that keeps stern oil paintings of past CEOs in its wood-paneled boardroom."
So that went on during the scam? Poker parties, and cigars?! I'm disgusted.
This protest from consumers is from the first scam, but you get a feel of what it was like the second go-around.
"I would like to join yours or any other class action. I submitted my rebate as directed (August '05). Then I got a message that they lost all my materials and I would need to resubmit all new originals (new originals?). I sent this to my States Attorney who said they moved to Arizona, so it was forwarded, now I get another note that they are now in Washington DC and cannot be pursued. What gives?"
"Sent 4 rebate forms for 2 phones. Didn't respond for 2 forms and rejected the other 2 claiming it was illegible and was post marked late. This is nothing but a scam. Wish I had seen these posts earlier. Never do business with these guys."
"My story is a lot like those in some of the other posts. I read the fine print. I followed Imphonic's rules to a "T." The company has responded by posting on its "rebatestatus.com" page that I failed to submit a valid copy of the sales receipt, a valid copy of the barcode, and that the bill was not paid in full. This is odd to me because I've now mailed in both the original barcode and a copy of it, and the original sales receipt and a copy of it. I have also submitted evidence that my bill is (and has always been) paid in full. I've been at this for two months now and I'm starting to get the sinking feeling that the company is stonewalling its customers instead of honoring its promises.
What's even more worrisome is that the company does not provide a phone number anywhere on its website or correspondence, so there is no possibility of discussing the matter with an actual person. They have not responded to my requests for an email or phone call that would provide additional information about what information they need or what form they need it in.
This lack of responsiveness has reenforced my impression that the company has no interest in honoring its rebates or communicating with its customers to rectify processing problems.
I am in a PhD program, so $200 is a big hit for me. I would have prefered to know up front that the phone cost $200 than to have now spent several hours trying to get a rebate that the company apparently has no intention of honoring."
"This is their typical business process. I had the same experience and they owe me $ 675.00 Beware of such CHEATS!"
The person to whom you responded is an obvious idiot (more than likely an employee or affiliated in some way with Wirefly and its parent company, InPhonic.
Trust me, InPhonic and Wirefly are in no way losing money with rebates. The more rebates they deny, the more EXTRA money goes into their pockets. They offer the rebates to LURE you in, then they use any excuse they can come up with to deny it. The other trick is that when they offer those rebates, they are fully counting on most people either forgetting or just not bothering to send in the rebates (again, EXTRA money in their pockets). They are not losing a single dime because the phone carriers pay them a very hefty premium to sign you up.
Otherwise, as a victim myself, please file a "report" with "ripoffreport.com." Do it right away and as though this is the first time you've posted anything about IhPhonic/Wirefly. I can't tell you why time is of the essence right now, but I should be able to do so within a week or so. In the meantime, go to that site and just describe what and when this all happened, how much you lost, etc.
When I learn more about it, I will definitely let all you guys know. It might be a sleazy way for them to be doing this right now (i.e., sending out rebates), but who the heck cares as long as we all get our money, right?"
"On the one hand, I feel like saying YOU S.O.B.s!!!
On the other hand, I suppose it's nice they're investing at least some of the rebate money they stole from us into a worthy cause.
Although I'm sure the only reason they're doing it is to try and glom on to something good to dilute some of their evil badness. Sorta like how Phillip Morris ran those public awareness ads about how harmful smoking is. And they do taint the X Prize for me now.
Yeah, I'd have to say this is mostly a bad thing, unless of course they put the InPhonic CEO in a rocket and blast him clear out of orbit. Hell I'd put my own money up to sponsor that event, but sadly I seem to be short by $300."
"This time it is different. I have followed everything to the letter. They communicated that they received my paperwork. It hasn't gotten past the "processing" stage. They won't tell me what is taking so long.
Apparently in response to my BBB complaint the rebate processor says it is InPhonic's responsibility to fund the rebate. Well they haven't. Smells like fraud to me.
I am a veteran shopper too, but I won't trust rebates anymore. Not only are they keeping my $100, but also the interest. Cumulatively, it probably accounts for the 57% stock jump they've had this year. Add on to that major portals like CNet supporting them and partnering with them, getting commissions."
"The rebate form which I carefully followed said 8-10 weeks. If that's not the correct amount of time, they should revise the form. They can't even follow their own rules. It's not only the $100 or more they are not giving each of us, it's also the interest on all that money. It adds up.
I'm never doing a rebate deal again, I don't care what company it's with."
"You are just another victim sir. I am too. They owe me $675.00. I am surprised why they are still in business!!!!
"I ALSO WAS PROMISED SOME REBATES FROM INPHONICS...4 TOTAL. I MAILED THEM ALL ON THE SAME DAY (200 DAYS) ON A 180-210 LIMIT.....I LISTED ALL INFO ON THE FORMS AND KEPT MY COPIES.
WHEN I CALLED TO INQUIRE ABOUT THEM....THEY SAID THAT 2 WERE RECEIVED ON TIME AND THE OTHER TWO WERE POSTMARKED 2&3 WEEKS LATER. ?????? HOW CAN THAT BE WHEN ALL FOUR WERE HAND WALKED INTO THE POST OFFICE ON THE SAME DAY.....AND THEY ALSO TOLD MY THAT I DID NOT LIST MY CELL # ON THE FORM...?????? I HAVE COPIES TO PROVE OTHERWISE.
WHEN I ASKED THEM TO SEND ME A COPY OF MY ENVELOPES WITH THE POSTMARK ON THEM...THEY SAID THAT WAS IMPOSSIBLE....THEY WANTED ME TO SEND THEM PROOF THAT I MAILED THEM WHEN I SAID I DID....I SAID THAT THE POST OFFICE DOESN'T PROVIDE COPIES OF THE ENVELOPES AFTER THEY ARE SENT THROUGH THE SYSTEM....AND AGAIN REQUESTED THE ENVELOPES TO PROVE THAT THEY WERE SENT LATE....WHICH THEY WEREN'T.
THIS COMPANY AND ITS EMPLOYEES SEEM TO BE CROOKS TO ME...AND I AM STILL TRYING TO GET MY $300.00"
"Don't hold your breath. They're going to keep telling you to "check back in 2 weeks" for a very long time, or until they find an excuse to deny your rebate outright. That's their MO, and is one of the reasons they're being sued by the Attorney General in DC (InPhonic's home state). IhPhonic's customer service, rebate center, and just about everyone at that company seems to have taken and passed a required course on "being rude."
Send your complaint to the DC Attorney General asap. Their lawsuit is on behalf of all consumers in all states who have sent them a complaint. The trial is scheduled for September, so don't wait. If you want more info on it, here's a press release from the AG's website regarding the lawsuit:
source of complaints: http://forums.cnet.com/5208-7817_102-0.html?threadID=29922&tag=forum-w;forums06
At this juncture, the wisest decision is to not pursue Caivis' gift program. If this mess occurred with InPhonic, it could very well happen again, IMO.
More digging was done on Day Online Solutions, and I got a step closer. We know Day Online Solutions was established in 2007 and incorporated in Indiana, however, new details have come to light. Their annual revenue is $50,000, and only one person is on staff; Andrew M. Day, the owner.
New address for them:
Now, while researching I spotted another Andrew Day. Both Andrews offer web design and development services. I had to e-mail one of them to clear up who was who...
Is http://www.designedbyday.com/ affiliated with the owner of Day Online Solutions in any way? I ask because I am in the process of finding a web designer, and I wanted to ask him/her a question about their services, but wasn't sure which site to contact in case both are run by the same person. Any help is appreciated. :)
The bad part of investigating is asking stupid questions, but I needed to know.
"No it isn't, sorry.
Click to enlarge images.
The response came from Andrew at Day Online Solutions, not at Designed By Day. Who wouldn't be confused? Same first and last names. In the same business. Not to mention a form of "Day" in the company names. So, Andrew's reply was helpful as I did not want to do a write up on the wrong man, lol. I wasn't going to mention this, but so there is no confusion I did. Since this is a small business operated by one individual, don't expect a lifestory. Andrew M. Day isn't a major CEO like those we've seen in this industry, so the information just isn't there. Coming out with an address, and knowing the owner's name must suffice.
Last week I tested one of the absoluterewards domains. After completing the survey I was prompted to enter a pin number.
From there, I confirmed my e-mail, but wasn't taken to a status page. I didn't take a screen shot; it was a bland, white page telling me my pin number was received. That was it. Can't contact them either. No key to unlock the door, nor a door to find! What can be done if you can't test things out? Should I e-mail Andrew? I don't want to pester him, the first e-mail I sent was horrid, lol. Hm, I need to think about this... *tapping fingers on desk*
Still looking into rewardscenter.net, and the only way of knowing about Redsail Media is testing them out. These things take time, unfortunately. It would be nice if one of the three contestants came out a winner! I will let you know my progress...
Updating ConsumerGain's requirements for my readers:
ConsumerGain-- CC offers used to be a requirement on the last page, but they're optional now. No time limit on their sites, and their offers eventually rotate. They have been paying since 2004. They are not scammers despite the bad press. You have to communicate with them via support ticket to keep everything going. Once you've completed your offers, alert them to it via support ticket. They also do manual credit, which is a plus. *stamp of approval*
I'm finally posting the non-referral I-Deal links to this blog. Hurry, these deals won't last long!
*links 'n such*
http://www.e-consumergift.com/?config=4578 - 8 offers, no refs/$500.00 gas card of your choice
http://www.productsurveycenter.com/?config=5856 - 12 offers, no refs/$500.00 Visa
http://www.e-bonusrewards.us.com/?config=5855 - 8 offers, no refs/$500.00 Visa + $250.00 bonus!
Member Source Media (ConsumerGain)--
http://giftsender.net/G/landing?campaignId=2109&subcid=1717#cid=2109#sid=70#vid=894 - 12 offers, no refs/$1,000.00 check
I'm going to try to double blog again since it's early May, and I've got time on my hands. I love this blog, and everything it stands for. We've accomplished much in a 2-year period. Next month marks our anniversary, and I am filled with ebullience. It should go well. A lot is shaking now. Enjoy the links everyone, and let me know if you have any questions.
I'm out like a light... Good night!