SPRINGFIELD – Nearly 32,000 residents are owed an estimated $2.7 million after they purchased a product or service from telecom giant Sprint but did not receive the rebate that incentivized the sale, Treasurer Michael Frerichs charged in a lawsuit announced today.
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Frerichs pursued the lawsuit after the telecommunications giant and its clearinghouse partner, Young America Corp. of Minnesota, kept the rebate money. The Treasurer’s Office has the ability to sue because rebates are considered unclaimed property if not paid within five years and must be surrendered to the state treasury. These purchases were made between 2003 and 2005.
"It is frustrating and wrong when these large companies with deep pockets and corporate attorneys break their promises, keep money that is not theirs, and dare people to file a lawsuit," Frerichs said.
Sprint is one of the largest providers of digital wireless and cellular telephone and data services in the United States. It routinely offers rebates and credits to incentivize new purchases. Young America is one of the largest rebate clearinghouses in the world.
Under the contract between Sprint and Young America, Young America draws the rebate check from its own bank account, and Sprint advances the funds to Young America to cover the rebates. The value of the uncashed rebate checks, known as "slippage," is kept by Young America and slippage is considered when negotiating contract terms. Therefore, Sprint and Young America have retained the value of unclaimed rebates owed to Illinois residents, the lawsuit alleges. Doing so violates the Illinois Uniform Disposition of Unclaimed Property Act (765 ILCS 1025 et seq.)
Sprint rejected settlement offers with Illinois despite entering into similar agreements with other states. Attorney General Lisa Madigan’s Office represents Frerichs. The lawsuit was filed in Cook County Circuit Court, case number 2016-CH-01864.
The Illinois Treasurer is the state’s Chief Investment Officer. Frerichs protects consumers by encouraging savings plans for college or trade school, increasing financial education among all ages, and removing barriers to a secured retirement. The office actively manages approximately $25 billion. The investment approach is cautious and returns $28 to the state for every $1 spent in operations.
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