California Appeals Court Approves Class Certification Against Retailer for Manufacturer’s Deceptive Rebate Ads

The California appeals court recently approved a class certification in a case regarding allegedly deceptive rebate advertising by Buy.com. In 2007, a consumer purchased a Connect 3D memory card from Buy.com for $30, with a $30 mail-in rebate. The consumer sent in the appropriate rebate forms and was approved to receive the $30 rebate. Connect 3D failed to pay the rebate even though the claim was made against the retailer, Buy.com. In 2007, Buy.com offered a $10 gift certificate to customers who had not received their rebates. The consumers filed a class action lawsuit against Buy.com alleging violations of the California unfair competition law, stating that Buy.com should have done due diligence as to asses Connect 3D's financial condition. The suit also alleged that Buy.com's advertising was deceptive. The appeals court allowed the consumer's class certification to proceed.

TIP: Retailers that advertise third-party rebates on their Web sites may face claims for the manufacturer's failure to pay any such rebate.