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InPhonic Settles With D.C.

Settlement Provides for Unspecified Restitution

By Joseph S. Enoch
ConsumerAffairs.com

February 26, 2007

Inphonic/Wirefly • Inphonic Complaints • Wirefly Complaints • InPhonic Responds --- News • Feds Slam InPhonic for Deceptive Rebate Practices • InPhonic Settles With D.C.

InPhonic, a business that sells wireless phones and service plans to customers throughout the country, has settled with the District of Columbia attorney general after thousands of complaints from consumers spurred the office to take action.

InPhonic sells popular phones and wireless services, such as Verizon Wireless, Cingular, T-Mobile and Sprint through its retail websites, Liberty Wireless and Firefly. The websites sell the merchandise at unusually low prices by offering large rebates.

The catch is that the rebate terms and conditions are confusing and even when they are met, many consumers say they still never receive those rebates.

ConsumerAffairs.com has received 165 complaints from consumers who thought they found excellent deals from InPhonic.

"I purchased a LG 5225 phone through www.libertywireless.com with the offer of a $100 rebate," Henry of Providence, R.I. wrote.

"I mailed the rebate form within 120 days of activation and my liberty wireless account remained current and active for 180 days since activation. I fulfilled all the obligations of the rebate contract. The activation date was 9/15/05 and the rebate form was mailed within the month of September. The rebate was promised within 4-6 weeks after 180 days of activation. Despite numerous inquiries, I still have not received the check as of now (9/21/06)," he said.

With 3,922 complaints logged against the company through the Better Business Bureau and the D.C attorney general's office, D.C. sued InPhonic in June 2006. Last week, the acting attorney general, Linda Singer, settled with the company.

Under the terms of the settlement, InPhonic must pay $100,000 to the District and make restitution to about 9,000 customers nationwide.

Two categories of consumers will be eligible for restitution payments:

(1) those who complained to either a government agency or a Better Business Bureau ("BBB"), anywhere in the United States, by February 15, 2007;

(2) those whose rebates were denied by InPhonic for any of the following four reasons -- the consumer failed to provide the "Guide to Wireless Service"; the consumer failed to provide a carrier invoice with a bill date or failed to provide an order number on their rebate submission; or the consumer's rebate submission was missing customer information.

There's no word yet on what the restitution exactly is because Singer's office is still gathering complaints, Traci Hughes, Singer's spokeswoman said.

Consumers who meet the above criteria can call Singer's complaint hotline in the next five months to add their names to the list of people who can receive restitution. That number is: (202) 442-9828.

InPhonic published a two paragraph press release in response to the settlement in which David Steinberg, the company's chairman and CEO says:

"We are pleased to put this matter behind us. We have had a great working dialogue with the Attorney General's Office, and we thank the Attorney General and her staff for their fairness and cooperation in closing this matter. InPhonic has made several enhancements to our customer experience and we continue to improve communication relating to the rebate process. Over the last year, InPhonic has engaged a new third-party rebate provider, significantly expanded our rebate customer service team internally and improved our rebate processes to ensure a positive experience for our customers."

There are no specifics on the "enhancements" Steinberg refers to and Inphonic did not return three phone calls from ConsumerAffairs.com seeking clarification.

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