Star Rebates deal sounded good but turned into a disappointment

KANSAS CITY, Mo. - What sounded like a good deal has turned into a disappointment for at least two Kansas City consumers. 

"We thought it was a pretty interesting concept," said Roger Neu. 

Neu signed up for ADT Home Security after one of the company's authorized dealers sold him on a rebate program. If he spent $100 a month on groceries, Star Rebates, Inc. was supposed to send him $20 in rebate money after he provides receipts and additional shopping information. If he spent another $100 on gas, he would get $20 more.

As a retired person on a fixed income, Neu thought it sounded like a good way to save some money.

He signed up in Aug. 2010. But his records show Star Rebates stopped sending him payments in early 2011. 

Neu isn't alone.

Janet Barker of Kansas City, Mo., also signed up when the authorized ADT dealer knocked on her door.

"Sounds like a win, win," she explained. "All I had to do was send in my grocery receipts, and my gas purchase receipts. Seemed like an easy thing to do."

When the rebate payouts stopped, Barker called Star Rebates for answers, but said she didn't get anywhere.

Star Rebates lists a Seattle address. But management at that building address said Star Rebates only receives mail there.

The Better Business Bureau reports 564 complaints nationwide against Star Rebates. The Washington Attorney General's office said Star Rebates is no longer in business. The AG's office did not take action since the company was actually based in Canada. 

An ADT spokesperson said the company was not affiliated with Star Rebates, but the company told its authorized dealers to stop doing business with Star Rebates after getting customer complaints. The spokesperson said both Neu and Barker will be contacted personally by ADT. 

Here is ADT's complete statement:

"ADT has never had a relationship with Star Rebates. Our authorized dealers are independent companies, but in 2011 we asked them to discontinue working with Star Rebates because of customer complaints brought to our attention. Nevertheless, if customer complaints surface, we notify the dealer of record so they can remedy the situation immediately. ADT's first priority is its customers."

How can consumers avoid being taken like this?  

It is important for consumers to do a little research before doing business, especially when it comes to door to door salesman.  

1)    With security companies, you should find out if you are dealing with the actual security company or a third-party business, like in this case.

2)    Check the company's Better Business Bureau rating and see if it has any unresolved consumer complaints. In this case, the authorized ADT dealer's BBB rating is an F. 

3)     Check to see if it is registered to do business in the state where it is located. Star Rebates is not registered with the Washington Secretary of State's office. 

4)      Check the company's licensing with city and state. According to the Kansas City BBB, if someone shows up door-to-door, nearly every municipality in the area requires them to have a permit.

The Kansas City BBB also provided these additional tips for this report.

If someone decides to do business with the security system company:

 -Customers should read the contract carefully to avoid any confusion or being trapped by deceptive fine print clauses.

 -Ask the alarm company about a moving clause to make sure they can transfer security to a new home without unnecessary fees.

 -BBB recommends consumer get three quotes before making any purchase. They just need to make sure to compare similar equipment and services.

 -Customers should get the mailing address and phone number of the company so they can cancel, if need be. They have three days to do so in Missouri or Kansas for any door-to-door sale.

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