Cuomo: AT&T Settles Over Deceptive Rebates

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    AT&T Mobility has agreed to pay up to $2.6 million to settle claims by New York's attorney general that its rebate offers were misleading and did not clearly disclose their limitations.

    Attorney General Andrew Cuomo said Tuesday that the Atlanta-based company fulfilled rebate offers with cards -- rather than checks -- that could not be redeemed for cash and expired in 120 days, conditions that were not adequately disclosed.

    AT&T Mobility also deceived consumers with offers of "free" products, which buyers had to pay the full price for and then mail in a form to get a rebate card, he said. AT&T Mobility is a unit of Dallas-based AT&T Inc.

    "AT&T, as one of this country's leading companies, has a responsibility to be forthright with its clients and not rely on deceptive practices to increase profits," Cuomo said. The agreement requires AT&T to stop referring to the rebate offer as "debit cards" in advertising unless they can be redeemed for cash.

    The settlement payments are for more than 200,000 New York consumers who got rebate cards from the company for buying cell phones and other wireless equipment and services from 2005 through early 2008, said John Milgrim, spokesman for the attorney general's office. A similar case is pending in California, he said.

    AT&T spokesman Marty Richter said the rebate cards are popular with its customers in New York and elsewhere, and many of its competitors use similar cards. They've made most if not all of the changes called for in the settlement agreement, he said.

    "We want to make sure our customers understand the terms and conditions of the cards and our rebate program, and we're voluntarily making details more prominent in advertising and point-of-sale materials," Richter said.

    According to the attorney general, consumers potentially eligible to receive funds will be notified by AT&T.