E-Commerce Times Talkback
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Thousands of online consumers are out millions of dollars, according to a bankruptcy filing by
e-tailer CyberRebate.com made in U.S. bankruptcy court in New York.
Of the top 20 debtors listed on the bankruptcy filing by CyberRebate, a site that promised
rebates of up to 100 percent on its highly overpriced merchandise, nine were individuals
owed between US$79,216 and $115,650 in rebates.
For those wondering "what next" there is an excellent support group at:
CyberRebate had to be a scam from the beginning. Consider what they were doing and the effects of some of their actions. 1) The cost of an item was falsely inflated up to and perhaps over 1000%. What did this do? I sell 500 MP3 players for about $300 each totaling sales at $150,000. CyberRebate sells those same MP3 players for about $2500 each, totaling sales at $1,250,000.00. Consider all the other items sold with these same inflated prices, and your annual sales volume is extremely (although falsely) high. Take that to a bank looking for a business loan, or to an investor looking for their money to be dumped into your business. You show the bank or the investor your falsely inflated sales for that specific period of time and they think WOW, that looks great. You get their money to continue building your falsely inflated business. All the while, you're giving yourself an enormous salary and in just a couple of years, you're in the money - specifically someone else's money. The company files for bankrupcy and, personally, you're not responsible.
2) They lure consumers into buying items with the idea of a 100% rebate, the old "get something for nothing" idea. Being skeptical, consumers try it with small purchases and get their rebates. They think, this is great, I did get something for nothing. Why not go for more? So they do. CyberRebate now has tens of millions of dollars from consumers (again other people's money) who are still thinking they'll get something for nothing. CyberRebate files for bankruptcy and all the consumers are collectively out millions of dollars.
Think it sounds like a scam? Sounds more like a plan!
I personally think Joel Granik, the founder of Cyberrebate, should go to jail. I think he purposely stole thousands of dollars from trusting individuals... Isn't there a law agaist what he did?
more info at http://www.nyeb.uscourts.gov/announcements/CyberRebate/CyberRebpetition.pdf
Three oldies but goodies spring to mind:
"A sucker is born every minute"
"There is no such thing as a free lunch" and
"A fool and their money are soon parted"
Why would any thinking person grossly overpay for goods in the expectation something may come their way later? That some believe their card issuers should be liable astounds me.
Iíve watched this company over 3 years
endorsed by web commerce orgs.
highlighted by CNN, Wall Street Journal, ZDnet
personal assurances by shopping guide owner any problems would be handled by him
he'd been using them with no problems
N.Y. Atty General gave satisfactory judgement 4/01
I don't feel like it was an overly risky investment to get a 20% return over 15 wks
It was a small diversification of my total investments.
I "bought" a number of products from Cyberrebate and received every rebate in six separate purchases between 2/99 and 1/01. I ended up with a free: modem, ethernet card, joystick, 3 mouses, CB radio, set of ginsu knives, computer microphone, 2 cordless headphone sets, coffeemaker, cellular headset, cordless phone (with headset), water filter, showerhead, some classic books, foot massager and some other knick knacks and gadgets that I cannot remember now.
I feel badly for the people who did not get their rebates, and was just lucky to get my last rebates in April and not purchase anything since then. When a company that has been doing business for over two years, and posts on its site that it has given out over 93 million dollars, says it will give you your money back, and has repeatedly done that, wouldn't you trust them?
I do not think the credit cards should be liable, I think that these clowns should be personally liable to the consumers. Since when is bankruptcy and limited liability designed to protect someone who sells you something at ten times its worth and promises to return all the money and doesn't? All the while sending rebates based on other people's inflated purchases (a pyramid scheme if you will) and knowing that some of the people at the end would be left with the big donut. That is at most fraud, and at least gross and reckless negligence, two good reasons to pierce the veil of corporate protection and sue the individuals personally. That's who should hold the bag.
Finally, I would avoid two other companies who are emulating C-rebate's gimmick: www.publisherspipeline.com and www.urbanq.com
While I feel sorry for the people who lost money here, what happens the next time one of these
places that is offering overpriced merchandise "free after rebates" goes belly up? Should the
banks bail out those shoppers too? Where does it end? I am a creditor of Hi-Val due to their
bankruptcy last year. I am owed $20 in rebates. Should my credit card company reimburse me for that?
We all pay into the shared risk process whether it's with credit cards or subsidized
uninsured motorist coverage.
If you want something to be indignant about, consider the cost we all bear for those
unwilling or unable to stop smoking. I'm sure compared to just one year's medical
expenses for those who have cancer from an activity that is well documented and well
known to be a extremely high risk behavior is a pittance compared to the few million the
credit cards may have to settle.
And of course we all pay into the shared risk system that allows smoker's to behave with
wreckless disregard for the consequences.
How can you possibly compare the associated medical costs from smoking to this? While I agree that smokers directly inflate medical costs to all, smokers were NOT looking for SOMETHING FOR NOTHING. For the most part, smokers are victims themselves, lured to an addictive habit by greedy corporations (much like shoppers looking for something for nothing were by CyberRebate). If you want to compare smoking, why not compare other things where the actions of others directly affects all of us? Auto insurance costs are driven up for all by the stupid and inconsiderate acts of others, health insurance costs are drivven up by the acts of a few, including doctors themselves.
These people are getting ripped off just like employees who are getting laid off with no severance pay after working without pay for weeks. But some companies apparently don't care -- if I were one of the affected consumers, I wouldn't hold my breath waiting for the money I was owed.
But the employees who worked without pay will be at the top of the heap
in the bankruptcy proceedings and will get something approaching 100%. The
people owed rebates will likely be at the bottom and get a far lower percentage.
I, personally think that Joel Granik, CEO of Cyberrebate, should be thrown in the slammer for many years. Why are all of these people who are posting on this board actually trying to turn the blame onto the consumer? This is nuts. Cyberrebate.com was highly deceptive and made its money from a rebate basis, not by making money off of products. Funny how there had been investigations into this company long before they declared bankruptcy, and now that they filed Chapter 11, everyone (including the AG) is running pointing the finger at everyone else. How nuts is this? And for some more interesting information...there are actual web-pages that have Mastercard, Visa and American Express that advertized for Cyberrebate.com! I know that this is not considered an endorsement, but WHY would major corporations suggest to use this Cyberrebate website? (Especially when these credit card companies are trying to snake out of holding the bag?) And does this mean that all executives that run Yahoo and other multi million dollar organizations are to blame? I don't think so. Cyberrebate.com is to blame and they should do the appropriate thing: Investigate that Joel Granik for FRAUD! This man knew what he was doing and took not just your average "Joe" for a ride, but major multi million dollar companies right along with him. This man FOOLED EVERYONE. I'd like to see this man behind bars and his little partner real estate attorney from South Florida, Joe Lichter. End of story.
You conspiracy theorists have a good theory, but did you ever consider the possibility that Granik had a risky new idea, and that in the end, it just failed?
I bought a load of items from c-rebate when they first started and items were priced NORMALLY. When I noticed prices of items started doubling and tripling, then I quit using c-net. I was always skeptical of c-rebate, because I couldn't see how it could make money except from investing soon-to-be-rebated-money until it was actually rebated. I figured things were not working as planned when c-rebate began jacking it's prices. And especially in the terribly economic times, c-rebate looked like a bad place to continue buying. So I quit buying there. Consumers take risks whenever they buy anything, except in ways that they are protected specifically by law. Buying from c-rebate seems no different to me, if, in fact, c-rebate legitimately intended to honor it's sale promises.
Either way, the consumers that lost money got screwed. But just because they got screwed doesn't entail that c-rebate was a big scam.