March 10, 2016
Illinois Treasurer Michael Frerichs is suing telecommunications company Sprint to recover an estimated $2.7 million owed to about 32,000 residents who purchased a product or service but did not receive the rebate that incentivized the sale, according to a Tuesday news release.
Frerichs pursued the lawsuit after Sprint and its clearinghouse partner, Young America Corp. of Minnesota, kept the money, according to the news release. 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. The purchases in question 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.
According to Frerichs’ office, the contract between Sprint and Young America says Young America draws the rebate check from its bank account, and Sprint advances the funds to Young America to cover the rebate. The value of the uncashed rebate check, known as “slippage,” is kept by Young America, and slippage is considered when negotiating contract terms.
Therefore, Frerichs explains in the release, the lawsuit alleges Sprint and Young America have retained the value of unclaimed rebates owed to Illinois residents. He says this violates the Illinois Uniform Disposition of Unclaimed Property.
Sprint rejected settlement offers from the state despite entering into similar agreements with other states, the release says. Attorney General Lisa Madigan’s Office is representing the treasurer.
STATE TREASURERS OUTLINE INFRASTRUCTURE PRINCIPLES IN RESPONSE TO PRESIDENT TRUMP’S $1.5T PROPOSAL https://t.co/0YaZMKUsrG