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FTC Forces Rebate Site to Pay Up

The Federal Trade Commission on Thursday said it has concluded an action against UrbanQ, a New York-based Internet retailer, that forces it to pay $600,000 that it promised consumers but apparently did not deliver.

The FTC said "UrbanQ and its principals told consumers who bought items from their Web site that they would receive the rebates which they called 'Q-bates'" within 12 weeks of their purchase.

However, many of the Q-bates, which often ranged from 70 percent to 100 percent of the original purchase price, "failed to arrive within the time promised, and many never showed up at all," the FTC charged.

The company and several individual defendants reached a court settlement with the FTC and the New York Attorney General's office promising to not continue its apparently dubious rebate policy.

"The FTC is concerned about the issues of properly submitted rebates not being paid," said Ron Waldman, attorney for the Northeast Region of the FTC. Waldman said it is difficult for consumers to protect themselves against an outfit like UrbanQ, but strssed that shoppers should be wary of steep discounts from unproven sales vendors.

UrbanQ, which launched in early 2000, is the net retailing division of a Nevada-based limited liability company, but lists Cedarhurst, New York as the principal location of business.

The FTC said UrbanQ's principals Daniel Greenberg, majority owner Michael Konig, and Steven Krausman violated federal law by falsely representing that consumers that bought the company's products would receive cash rebates within 12 weeks of their order. "In fact, many consumers never received any rebate at all," the FTC said.

"If you've never heard of a company and are not familiar with its brand and reputation, then you have to figure that in as part of your consumer decision-making process," Waldman said. Consumers need to ask themselves "how will this company be able to pay all these rebates?"

The FTC filed its legal settlement with UrbanQ in federal court in New York on Thursday, but the order must still be signed by a judge.

UrbanQ's Web site (www.urbanq.com) bills itself as a family site that offers men's, women's, children's apparel, accessories, home and convenience items in a variety of discounted settings. Much of the site is built on bringing consumers deeply discounted merchandise with an "innovative flare."

"If a consumer has a problem getting a timely rebate, then you should document everything, complain to the company, and potentially complain to the attorney general's office or the Federal Trade Commission," Waldman said.