The state attorney general won a judgment against Prime TV of Moore County, which failed to pay thousands of customers who were promised cash back.
"This company lured customers with a rebate, then threw every roadblock in the way when consumers tried to claim their money," Attorney General Roy Cooper said. "We're going to make sure that consumers now get the rebates they deserve."
The legal action announced Tuesday resolves charges by Cooper that Prime TV of Southern Pines and its owners, David and Annette Hagen, failed to pay rebates for installation costs owed to many consumers who signed up for satellite television service with the company.
Tricia Jackson who paid Prime TV to install a satellite dish. The company promised a $99 rebate, but she could not get it.
"They told me that I had failed to include one item, but they weren't specific about which item it was and they couldn't tell me," she said.
Former Prime TV employees told WRAL months ago they were trained to stall and mislead consumers seeking rebates.
"We knew these customers stood a very good chance of never getting their money back," a former employee of Prime TV said.
Prime TV, which stopped selling DirecTV systems, must now contact customers and offer rebates again. The company was also ordered to pay the state $50,000.
Under terms of a consent judgment issued late Monday by Wake County Superior Court Judge Donald Stephens, Prime TV must send a letter approved by Cooper's office to all consumers whose rebate claim was rejected on or after Jan. 1, 2002.
The letters, which the company must send within 52 days, will give Prime TV customers 90 days to file for a rebate again using a simplified rebate form. Eligible customers should expect to receive a letter soon. Prime TV then has 30 days to mail a rebate check to each customer who returns the form.
If Prime TV denies any claims, the company must explain why to the attorney general's office, which has the final say on whether or not a consumer is eligible for the rebate. If Prime TV fails to pay any eligible rebate claim, then the Hagens are responsible for the costs of providing those rebates.
In addition, Prime TV, the Hagens and any affiliated company are barred from offering rebates to customers for three years. They may advertise a rebate offered by a separate company,such as DirecTV, but only if that company administers and pays for the rebates in full and only if they first notify Cooper's office.
"They apparently don't have the business ability to operate a rebate program properly," Assistant Attorney General Len Green said.
Prime TV and its owners are permanently barred from misleading North Carolina consumers or from misrepresenting any warranty they provide. They must also send refunds to any consumer who has complained about the three-year protection plan purchased from the company.
"My office worked hard to try to make Prime TV comply with the rebate promises it made to consumers," Cooper said. "Now, we're holding the company and its owners responsible for making good on those promises."
Trey Yelverton, the attorney for Prime TV, said the company worked closely with the Attorney General's Office and said the agreement is "fair for all parties."
One final note, Hagen is the chief executive officer of another business called Gatelinx that operates out of the same building.