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Department of Justice Adds Defendants To Lawsuit Against Dane County Window Retailer Accused of Using Misleading "100% Rebate" Scheme to Sell Its Window Products
MADISON Attorney General J.B. Van Hollen announced today that his office has expanded a consumer protection lawsuit to include a Colorado company, National Rebate Fund, Inc. The state's original action, filed in June 2007 in Dane County Circuit Court, was brought against Kool View Co., Inc., of McFarland, Wisconsin, and alleged that Kool View used misleading representations in its marketing of "100% rebates" from the purchase of windows and other products, ostensibly tied to a participation in an "energy field study." After the state brought its action, Kool View agreed to stop marketing the "NERF" rebates.
According to the state's complaint, National Rebate Fund, Inc. offers rebates to consumers through its program known as the National Energy Rebate Fund, or NERF. The lawsuit alleges that Kool View and the National Rebate Fund, Inc. have engaged in deceptive marketing of the NERF rebate program. Among the defendants' representations that the state alleges are false, deceptive or misleading include:
1. That sufficient funds are set aside to pay rebate claims;
2. That the escrowed rebate funds are invested and mature during the four-year waiting period before consumers can claim their rebates;
3. That the rebate program is tied to participation in an "energy field study;"
4. That the rebates are funded by the savings generated from the reduction in traditional media advertising by the participating merchants;
5. That the rebates are similar to typical consumer rebates, or to insurance policies;
6. That the rebate payments are handled by an unbiased, independent third-party company;
7. That the rebates are limited to the first 100 customers, or are being offered only for a limited time.
According to the complaint, since 2005, Kool View customers have received NERF rebate vouchers totaling over three million dollars. These vouchers have been represented to be redeemable four years after issuance. On average, Kool View rebate customers hold vouchers with a face value of approximately $15,000, with some consumers holding rebate vouchers exceeding $40,000. However, the rebate fund contains at most only 8% of the amount required to redeem the entire rebate vouchers issued.
In addition to adding National Rebate Fund, Inc. as a defendant, the amended complaint adds as defendants to the suit the owner of National Rebate Fund, Inc., Timothy Stubbs, and two other key employees of the company, Dan Golden and Matthew Stubbs. The three individual defendants all reside in Grand Junction, Colorado, which is also where National Rebate Fund, Inc., is located.
The amended complaint also names as a defendant Alan Anderson, the owner of Kool View Co., Inc., who resides in Madison, Wisconsin.
The case was investigated and referred to the Department of Justice by the Wisconsin Department of Agriculture, Trade and Consumer Protection. In its suit the state seeks an injunction prohibiting the defendants from further marketing of the rebate program, as well as forfeitures for violations of Wisconsin consumer protection laws and restitution for injured Wisconsin consumers.
The suit has been assigned to Dane County Circuit Court Judge Steven Ebert. The State is being represented by Assistant Attorneys General Lara Sutherlin and John Greene.