Free gas!
Got your attention? Thought so. Unfortunately for thousands of drivers, some alleged scammers think along the same lines.
When retailers like Ashley Furniture and La-Z-Boy (Stock quote: LZB) passed out vouchers to enroll in a free gas program last summer, many motorists jumped at the opportunity. What they didn’t bank on was an elaborate sign-up scheme cooked up by what law enforcement officials now say was basically a scam.
Here is how the alleged fraud worked, and how you can protect yourself from offers that sound too good to be true.
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How the Scam Went Down
In February the Florida attorney general filed a lawsuit against Tidewater Marketing, a Clearwater, Fla.-based company, and ordered them to stop distributing gas vouchers, claiming they used deceptive marketing practices, ignored customer complaints and failed to pay up on their promises.
Tidewater Marketing, which reportedly did not admit liability, is now in receivership. Further litigation is pending.
“This company created certificates out of thin air,” says John Zajac, a spokesman for the West Florida Better Business Bureau. “Once consumers turned in their receipts to get their rebate gas cards, they either never received the gas cards, or the gas cards owed to them did not arrive within the time frame promised by the company.”
Zajac says the bureau has received more than 3,000 complaints from 47 states across the country, as well as three provinces in Canada. The attorney general’s office, meanwhile, estimates that more than 130,000 vouchers were distributed across North America.
The vouchers were distributed by dozens of retailers throughout North America, including car dealerships like Ford (Stock quote: F), Nissan (Stock quote: NSANY) and BMW (Stock quote: DAI). Retailers bought the gas vouchers from Tidewater and then used the certificates as an incentive for customers to purchase cars, furniture and electronics. The retailers’ liability is unclear, since they claim that they too, were duped by Tidewater.
Retailers hoping to attract potential customers gave out vouchers promising up to $100 worth of free gas. But before receiving the certificates, customers had to pay a sign-up fee of $5. Then in order to claim their free gas, drivers had to spend a minimum of $100 on gas each month, after which they were promised a $25 gas card (and no more than four total).
