Iowa sues rebate fulfillment firm

The state of Iowa has filed suit against Young America, claiming that the rebate fulfillment company is sitting on $43 million in rebates due to Iowans. Under escheat laws, unclaimed rebates must be reported to the state that is the last known residence of the intended recipient.

"We view non-compliance by the rebate fulfillment industry with unclaimed property requirements to be an industry-wide issue," [the State Treasurer] said. "We will soon be knocking on the doors of other rebate processors to seek compliance with our unclaimed property laws."

The lawsuit notes that Young America "took as its own revenue" uncashed checks totaling almost $43 million from January 1, 1995, to June 30, 2002. Such funds are called "slippage" - checks issued to consumers that are not cashed.

Young America denies the charges.

Anderson says his company has been checked by two states and found to be doing business properly. He says they've been audited by Minnesota and Oklahoma and he says the department of treasury in both states examined their records and said they were not a holder of unclaimed property. Anderson says they're simply a third-party fulfillment service provider that mails rebate checks for companies.

Anderson would not say if he thought some of the companies that hire Young America are withholding rebates. Anderson says, "We don't take any position regarding our clients and we don't offer them legal advice."