FTC Settles With CompUSA in Rebate Dispute

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The Federal Trade Commission (search) said Friday it had reached settlements with privately-held computer retailer CompUSA Inc (search). and device maker QPS Inc. over consumer rebates that the agency charges were late or never arrived.

The FTC said it was the first time it had charged a nationwide retailer over rebate advertising practices and rebate promises on behalf of a manufacturer.

Under the settlement, CompUSA will pay consumers who purchased QPS (search) products at its stores their rebates which ranged from $15 to $100 each.

"When it comes to rebates, retailers must deliver on their promises," Lydia Parnes, acting director of the FTC's Bureau of Consumer Protection, said in a statement.

"The message to retailers is clear - the FTC is on the beat and will take action if you advertise manufacturers' rebates when you know they aren't honoring their promises," said Parnes.

A representative of CompUSA could not immediately be reached for comment.

The FTC charges that CompUSA engaged in deceptive and unfair practices relating to rebate offers made for both its own branded products, as well as those of QPS, a manufacturer of computer add-on equipment.

CompUSA told consumers that rebate checks would be mailed within six to eight weeks but many consumers experienced delays of months and some never received their checks, the FTC said.

The FTC said QPS principals, Priti and Rajeev Sharma, would be prohibited from engaging in similar rebate practices in the future. QPS filed for bankruptcy in August 2002, the agency said.

Rajeev Sharma acknowledged that QPS had made mistakes but said the settlement would help. "The bottom line is the consumer gets paid what they are owed," he told Reuters.