Treasurer Frerichs sues Sprint on behalf of nearly 32,000 residents

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UPDATE – Sprint has released a statement regarding the lawsuit filed by the Illinois Treasurer.

“Sprint denies the allegations in the lawsuit filed by the Illinois Treasurer. This lawsuit is not about rebates that were withheld, but about rebates that were sent, not cashed. We do not believe the claims against Sprint have merit, and we will continue to seek a fair resolution in our settlement discussions with Illinois.”

We will provide more updates as the situation progresses.

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SPRINGFIELD – Illinois State Treasurer Michael Frerichs announced today he is pursuing a lawsuit against phone company Sprint after he says they did not pay nearly 32,000 residents an estimated $2.7 million.

Sprint is one of the largest providers of digital wireless and cellular telephone and data services in the United States. It routinely offers rebates and credits to incentivize new purchases.

Frerichs pursued the lawsuit after Sprint and its clearinghouse partner, Young America Corp., of Minnesota, allegedly kept rebate owed to customers who purchased a product or service from the telecommunication giant. He explains the Treasurer’s Office has the ability to sue because rebates are considered unclaimed property if not paid within five years and must be surrendered to the state treasury.

These purchases were made between 2003 and 2005.

“It is frustrating and wrong when these large companies with deep pockets and corporate attorneys break their promises, keep money that is not theirs and dare people to file a lawsuit,” Frerichs said.

Under Sprint and Young America’s contract, Young America draws the rebate check from its own bank account, and Sprint advances the funds to Young America to cover the rebates. The value of the uncashed rebate checks, known as “slippage,” is kept by Young America. Slippage is considered when negotiating contract terms.

Frerichs explains that through this process, Sprint and Young America have allegedly retained the value of unclaimed rebates owed to Illinois residents. Doing this violates the Illinois Uniform Disposition of Unclaimed Property Act (765 ILCS 1025 et seq.)

Sprint rejected the settlement offers with Illinois despite engaging in similar agreements with other states.

Treasurer Frerichs is being represented by Attorney General Lisa Madigan’s Office, and the lawsuit has been filed in Cook County Circuit Court, case number 2016-CH-01864.

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