Beware of OCZ Rebates! I wish I had know this.

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BecauseScience

[H]ard|Gawd
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Oct 9, 2005
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I've been an OCZ customer for years. I don't generally overclock so it's primarily the great rebates that draw me to OCZ. Unfortunately, I won't be buying from OCZ until they discontinue use of prepaid Visa cards from Citi.

Here is a list of things that I wish I had known before agreeing to have a prepaid Citi Visa card issued in my name:

  1. The cards can be charged for more than their current balance leading to an overlimit situation.
  2. There is an overlimit fee.
  3. There is a monthly "service fee" with less than straightforward rules.
  4. The card does not automatically close when it's empty. It remains a liability until you manage to close it.
  5. You are responsible for all charges made to the account even if they exceed the initial balance.
  6. Legally, you are responsible for all charges made to the account even even if they were not authorized by you. You have no legal protection against unauthorized / fraudulent charges as you do with a credit card.
  7. It takes a lot of time and energy to figure out how to close the account.
  8. To use the card you must agree to binding arbitration and pay the full cost of arbitration if you initiate it. What this means is that you give up the right to sue.
  9. There is no way to cancel on the account management website.
  10. There is no option to cancel the account in the automated phone system.
  11. There is no obvious way to get to a live operator from the automated phone system.

The automated telephone system doesn't take you to an operator when 0 is pressed. Yelling the word "OPERATOR!!!" into the handset doesn't work either. (This works on many automated systems. Some of them can even distinguish yelling and will fast track you to an operator!)

I called the special "lost or stolen" line and asked to cancel. They refused. I needed to talk to a rep on the regular line. I told the guy that I had been though all of the menus on the regular line and never heard an option for a live rep. The "lost or stolen" rep gave me instructions on which menus to follow to get to a person. The menu items he told me to select were missing from the main line.

I went through the menus until I found something that was likely to require a human. Finally, I got through to a person and managed to cancel the account.

Total time: about 45 minutes.

The menu item that gets you a live rep is "change of address" on the main Citi prepaid menu.

Happy canceling!
 
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Wow, I normally take them the day I get them and run the cards for cash at my bank. Done.
 
gwarren007 said:
Wow, I normally take them the day I get them and run the cards for cash at my bank. Done.
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But you're not done just because you've extracted your $15 or $20. That was the whole point of my post.

Even though your prepaid card has a zero balance you still have an account with the issuer. You are responsible for whatever charges might be made to the account even if they are unauthorized / fraudulent. You aren't done until you've closed the account.

If you google you will find instances of people who emptied their prepaid card and then forgot about it. Many months later debt collectors began to call. They find out that someone managed to charge their "empty" prepaid card and they are now on the hook for the charges. In many cases the 90 day charge dispute window has passed. They gave up their right to sue by using the card. They have no options.
 
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What the heck...I have a few empty cards! Now I have to find them and destroy them. Waste of my time. I wouldn't single out OCZ though. Many companies are doing this type of rebate. Sucks...
 
I don't think you can sign away your right to sue in this fashion. A small claims judge would likely find those clauses egregious and if there were merit to your case, award in your favour. But IANAL and all that. If it's a significant sum, talking to one is probably worthwhile.

This is truly awful though. I had no idea this was the situation with these cards, I figured, like you, that they were like gift cards that could be used at any Visa merchant. I've always avoided rebates of any kind though because I dislike the practice and favour lower up-front prices, so I probably won't be too affected, but thanks for the heads up nonetheless.
 
Do you have a link for all of these stipulations?
Posted via [H] Mobile Device
 
inglewood78 said:
What the heck...I have a few empty cards! Now I have to find them and destroy them. Waste of my time. I wouldn't single out OCZ though. Many companies are doing this type of rebate. Sucks...
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Unfortunately, destroying the card doesn't close the account. The only 100% safe thing to do is close the account.

I posted about OCZ because they sent my rebate as a prepaid card. I don't mean to pick on them. I think they're a good company but I would really like to see them stop using prepaid cards for rebates.

Other companies are still doing checks. I just filled out an Antec rebate a few weeks ago and there was no mention of it being a prepaid card. If Antec starts doing rebates via prepaid card I'll be on them too.

Just be aware that companies are not switching to prepaids for the customers convenience. They are doing it because it costs them less. Some percentage of people will never empty their card. Some people will forget to use it before the "service fees" kick in. To top it off, Visa gets a "swipe fee" of about 3% on all purchases. All of that amount to profit for the issuer. Part of that profit is kicked back to the company who issues the rebate.
 
delvryboy said:
Do you have a link for all of these stipulations?
Posted via [H] Mobile Device
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Nope. I found most of it out by reading the "Citi Prepaid Services Prepaid Card Agreement" that arrived along with my prepaid card. It looks and reads very similar to a regular credit card agreement.

The rest I learned by googling and reading. The bit about no legal protection from unauthorized charges came from news stories (by major media) on the topic.

Citi says that they will not hold you responsible for unauthorized charges but you are counting on them to uphold that promise. You have no legal protection. Also, you must follow their rules on the matter like reporting all fraudulent charges within a certain timeframe, etc. If Citi decides to make you pay anyway what can you do? You have agreed to arbitration and given up the right to sue.

Regarding keenan's concern that you cannot give up the right to sue, Citi devotes three of ten panels in the user agreement to the topic of arbitration. Somehow I think Citi's lawyers have though this one through.
 
keenan said:
I think you're correct after doing a bit of research.

e.g. http://www.consumeraffairs.com/news/right_to_sue.htm
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Actually, you were right! :) I found a paragraph in the agreement that states that filings in small claims court are not subject to arbitration so long as you don't employ a lawyer. I think that's what they mean by an "individual non-class, non-representative claim" but I'm not a lawyer.

If your dispute is moved out of small claims or is too big for small claims in the first place you're SOL.

Your article says that both sides split the cost of arbitration. However, the Citi agreement states that the party who initiates the arbitration process pays the full cost of arbitration. Have a beef with Citi and want to go into arbitration? You pay for everything. They pay for nothing.

I have another correction: It's not Citi who chooses the arbitration location. The arbitration company chooses. The agreement states that they will choose a city close to you but the city also has to be the location of a US District Court.
 
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as long as they don't have my SS, prepaid cards cant do anything to harm you, btw I have had a few prepaid cards go over the limit, 2 years later, not a single debt collector has called
 
86 5.0L said:
as long as they don't have my SS, prepaid cards cant do anything to harm you, btw I have had a few prepaid cards go over the limit, 2 years later, not a single debt collector has called
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Years ago I began receiving a b.s. "new age" alternative health newsletter that I didn't request. I started to get bills. I threw the bills away because I never ordered the newsletter. "What can they do?" I thought. I threw away bill after bill but they kept sending me their stupid newsletter. I never got a collection call about it.

Five years later I was going over my credit report. Guess what I found? A claim of nonpayment in the amount of $30 for the new age newsletter. The interesting thing is that the debt was payable to a debt broker not the original newsletter company.

Collectors won't call l over small amounts but they sure as hell will put it on your credit report. Sometimes it takes years. Debts like that are gathered into bundles and then sold for pennies on the dollar. Your debt may have a new owner a few times a year. It's up to each owner to decide if and when they're going to try to cash in. Just because you haven't heard anything yet doesn't mean you're out of the woods.

I never gave the newsletter company my social, obviously, as I had never signed up to receive the newsletter. That didn't stop the debt broker from finding me five years later in a different state.
 
oh god wat a hassle. I just sent in a rebate to ocz for $20 and its for the prepaid citi card... ughh.

so what do i do when i get it? bring it to the bank to exchange for cash and then call the 1800 number to close the account?
 
Yes, I would like to the know process to close it as well as the issue. Just as simple as calling the Debit Card company?
 
MSI is another company to avoid rebates from. I got screwed over for $30 from my MIR. One guy on the internet said he didn't receive a $150 MIR (from MSI).
 
Thanks for the heads up and work around. I have $110 worth headed my way.
Posted via [H] Mobile Device
 
kristof said:
Years ago I began receiving a b.s. "new age" alternative health newsletter that I didn't request. I started to get bills. I threw the bills away because I never ordered the newsletter. "What can they do?" I thought. I threw away bill after bill but they kept sending me their stupid newsletter. I never got a collection call about it.

Five years later I was going over my credit report. Guess what I found? A claim of nonpayment in the amount of $30 for the new age newsletter. The interesting thing is that the debt was payable to a debt broker not the original newsletter company.

Collectors won't call l over small amounts but they sure as hell will put it on your credit report. Sometimes it takes years. Debts like that are gathered into bundles and then sold for pennies on the dollar. Your debt may have a new owner a few times a year. It's up to each owner to decide if and when they're going to try to cash in. Just because you haven't heard anything yet doesn't mean you're out of the woods.

I never gave the newsletter company my social, obviously, as I had never signed up to receive the newsletter. That didn't stop the debt broker from finding me five years later in a different state.
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thanks for the headups, something to keep in mind, I have a clean credit score so far :cool:
 
I am sure this will also be the case with everyone getting AT&T rebates.
They are issuing cards as their rebate on phones, uverse and upgrades.
MAN its like the mastercard I had with my bank. I got a $1 a month fee for using it.
I quit using it and got a $2 a month inactivity fee. I called the bank...we dont' charge fees like that.
I called securecard the company that the bank uses to issue the cards...we don't charge fees for that.
NO ONE did so where did the Fing money go????
Watch these cards. I am sure there will be fees but where do they go and how do you find out about them.
Will citibank send you a monthly statement of this BS or will it only come at the end of the year that we owe them $$$$$ and to discontinue a DEAD 1 time use card with 0 balance we are going to get F'ed big time on this.

NO I am not saying a word about OCZ I have gotten rebate checks from them in the past and they were fair on them. They might see this as a way of easing the work of issuance. And I bet they are getting some money from
citibank too.
and the scary part is 6 on your list.....OH HELL I bet 4 people in china know the number before you do.
 
It's important that everyone pull their each of their three reports at least once a year, otherwise stupid crap like this can sneak up on you. You get one free viewing per credit agency per year. It's best to stagger your credit report pulls throughout the year rather than getting them all at once.

It's also very important to know The Statute of Limitations for the various types of debt for your state. That's a powerful weapon against this kind of crap.

86 5.0L said:
thanks for the headups, something to keep in mind, I have a clean credit score so far :cool:
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No problem. :) Good that you keep up on your credit report. I never used to. Most people don't so long as their score is ok.

sparks said:
I am sure this will also be the case with everyone getting AT&T rebates.
They are issuing cards as their rebate on phones, uverse and upgrades.
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A lot of companies and even government agencies are issuing these prepaids. It's insane.

sparks said:
MAN its like the mastercard I had with my bank. I got a $1 a month fee for using it.
I quit using it and got a $2 a month inactivity fee. I called the bank...we dont' charge fees like that.
I called securecard the company that the bank uses to issue the cards...we don't charge fees for that.
NO ONE did so where did the Fing money go????
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Sounds like Paypal. I had $20 disappear from my account one time. No one could tell me where it went.

sparks said:
Watch these cards. I am sure there will be fees but where do they go and how do you find out about them.

Will citibank send you a monthly statement of this BS or will it only come at the end of the year that we owe them $$$$$ and to discontinue a DEAD 1 time use card with 0 balance we are going to get F'ed big time on this.
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I don't know if they send statements or not. I doubt it. I had my card for a week before I closed the account. I wasn't giving them a chance to f*** me.

sparks said:
and the scary part is 6 on your list.....OH HELL I bet 4 people in china know the number before you do.
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Credit card "skimming" is also a major concern.

http://en.wikipedia.org/wiki/Credit_card_fraud#Skimming

http://www.youtube.com/watch?v=Ns80IjFHyrg

http://www.youtube.com/watch?v=m3qK46L2b_c

This skimmer is unbelievable: http://www.krebsonsecurity.com/2010/01/would-you-have-spotted-the-fraud/

If you are skimmed then #1 combined with #6 can lead to major hassle. Most of these cards aren't usable at ATMs so skimming at an ATM isn't a danger. It's more employee skimming like the first youtube video.
 
The cards can be charged for more than their current balance leading to an overlimit situation.

yea this is also another indication of them planning on fing anyone with one of these.
Most cards require you to ask about overprotection etc.
since they are going to allow you to charge any amount and a lot of people will use a $20 card to buy a $30 item expecting to pay the $10 difference.
Not here they will run it thru and the person will sign either thinking well maybe the card is worth more or I just scammed &&& company... then a $10 at 33% will be a wakeup
 
sparks said:
The cards can be charged for more than their current balance leading to an overlimit situation.

yea this is also another indication of them planning on fing anyone with one of these.
Most cards require you to ask about overprotection etc.
since they are going to allow you to charge any amount and a lot of people will use a $20 card to buy a $30 item expecting to pay the $10 difference.
Not here they will run it thru and the person will sign either thinking well maybe the card is worth more or I just scammed &&& company... then a $10 at 33% will be a wakeup
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From what I've read, you're not in danger of running over the balance at "legitimate" businesses since the card will come back as having insufficient funds. If you try to charge $30 on a $20 card at the local big box store the transaction will be declined and you should be fine.

I've been unable to find out exactly how these cards can be charged into an overlimit situation. Everything I've read indicates that such charges are either done by illegitimate people/businesses or the result of some unfortunate interaction of holds/charges/refunds/fees/etc.

There is an overlimit fee stated in my card agreement from Citi so I take that as proof that it can be done. Also, there are numerous news stories about peoples' cards being charged by criminals after they were empty.

The overlimit fee on my Citi card from OCZ is "$15 per incident."

EDIT:

Here's a story about a guy who ran his card to zero balance at a restaurant and left the card with his server thinking it was "empty." Someone managed to charge it to a negative $157 balance!

http://abclocal.go.com/wpvi/story?section=news/special_reports&id=7115961
 
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Over in the FatWallet.com forums, there are some threads about converting Visa gift cards to cash by going to your bank and getting a cash advance. Be sure to ask about fees before doing this. I've tried it only once and was charged no fees.

Some binding arbitration provisions may be invalid because those totally impartial arbitrators have a track record of favoring the card companies in 98-99.6% of the cases, and some court cases in the past year or so have tossed them out, most recently over Dell Inspiron laptops.
 
Man this really sucks.

But really don't single out OCZ. My last rebate was on a Corsair PSU, and it was in a prepaid card like that :(
 
inglewood78 said:
What the heck...I have a few empty cards! Now I have to find them and destroy them. Waste of my time. I wouldn't single out OCZ though. Many companies are doing this type of rebate. Sucks...
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agreed, many rebates do this. but thanks for the post OP, very enlightening... and frightening
 
I found what may be a loophole out of the entire prepaid mess. This is from the text of a recent Asus rebate:

For U.S. customers, if your rebate payment is $10.00 or greater, you will receive a Visa® Prepaid Card.

...

Cards are issued by Citibank, and managed by Citi Prepaid Services.

...

In the event you prefer a check and upon receipt of your Prepaid Visa Card, simply call the toll free number on the back of the card and follow the telephone-prompts. Once you enter the card account information, opt out to speak to a live customer service representative and request a check.
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I was wondering when the actual acceptance of Citi's account agreement happened. Did it happen when I submitted my rebate or when I accessed my prepaid card for the first time? The Asus rebate text makes it sound like acceptance happens on the first use.

This may be optimal solution: When your card arrives call the number on the back. Choose to "opt out" and then request a check. The big question is whether there is a fee for check mailing. My OCZ rebate listed a fee for rebate by check on the original rebate form. I wonder if that's different than requesting the prepaid card and then opting out once it arrives.

The big advantage in opting out is that your avoid ever having an account with Citi prepaid services. No account is better than a canceled account IMHO.

Anyone have a Citi prepaid rebate on the way and feel like trying this?
 
Here's a recent story about card skimming. This is the biggest operation I've ever heard of.

Criminals hid bank card-skimming devices inside gas pumps -- in at least one case, even completely replacing the front panel of a pump -- in a recent wave of attacks that demonstrate a more sophisticated, insidious method of stealing money from unsuspecting victims filling up their gas tanks.

Some 180 gas stations in Utah, from Salt Lake City to Provo, were reportedly found with these skimming devices sitting inside the gas pumps. The scam was first discovered when a California bank's fraud department discovered that multiple bank card victims reporting problems had all used the same gas pump at a 7-Eleven store in Utah.
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http://www.darkreading.com/database_security/security/attacks/showArticle.jhtml?articleID=223100233
 
kristof said:
I found what may be a loophole out of the entire prepaid mess. This is from the text of a recent Asus rebate:



I was wondering when the actual acceptance of Citi's account agreement happened. Did it happen when I submitted my rebate or when I accessed my prepaid card for the first time? The Asus rebate text makes it sound like acceptance happens on the first use.

This may be optimal solution: When your card arrives call the number on the back. Choose to "opt out" and then request a check. The big question is whether there is a fee for check mailing. My OCZ rebate listed a fee for rebate by check on the original rebate form. I wonder if that's different than requesting the prepaid card and then opting out once it arrives.

The big advantage in opting out is that your avoid ever having an account with Citi prepaid services. No account is better than a canceled account IMHO.

Anyone have a Citi prepaid rebate on the way and feel like trying this?
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They need your signature for a reason. After signing you enter into an agreement. However without a social security number or other identifiers they have no way of tying this account to your credit. I'm not a financial expert, but this information should be correct. We all need to contact the FTC and Attorney General's Office to alert them of this new practice... disgusting.
 
vista_blista said:
They need your signature for a reason.
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You never supply your signature anywhere for these prepaids. It's like a software EULA where your use of the product constitutes your acceptance of the agreement.

vista_blista said:
However without a social security number or other identifiers they have no way of tying this account to your credit. I'm not a financial expert, but this information should be correct.
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See post #12 for a real life example of how companies can hit your credit report without a signature or social security number. Unless you live "off the system" it's easy for companies to find you and attack your credit. All they need is a name, full address, and dates of residence at the address. All of that information is on file at the credit agencies if you have any kind of credit with anyone, rent, have utilities in your name, have a cellphone, etc.
 
kristof said:
You never supply your signature anywhere for these prepaids. It's like a software EULA where your use of the product constitutes your acceptance of the agreement.



See post #12 for a real life example of how companies can hit your credit report without a signature or social security number. Unless you live "off the system" it's easy for companies to find you and attack your credit. All they need is a name, full address, and dates of residence at the address. All of that information is on file at the credit agencies if you have any kind of credit with anyone, rent, have utilities in your name, have a cellphone, etc.
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The OCZ rebate form requires a dated signature in order to process.

And just about any company can take a hit on your credit. They only need your name and address. Due to lack of any basis, these claims can be easily disputed. Obviously this is time consuming and an annoyance.

Receiving unsolicited mail such as credit cards, prepaid debit cards and magazines etc. doesn't automatically enter you into an agreement. Otherwise the system could easily be abused by scammers. Although, as it has been stated, check your credit report and you'd be surprised what is on there. Now the Verizon prepaid debit rebates are a different story entirely, as you have previously entered into an agreement with them. They have your entire history on record.
 
vista_blista said:
The OCZ rebate form requires a dated signature in order to process.
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But you don't have access to the Citi Prepaid agreement at the time that you sign your OCZ rebate. You don't receive the Citi Prepaid agreement until your rebate arrives.

A company can't collect a signature for one thing (rebate application) and then apply it to an agreement that they mail out three months later. Contract law doesn't work like that. It's a fundamental part of contract law that both parties know the terms of the contract at the time it's entered into.

When you finally do receive the Citi prepaid terms, if you do not agree to them you can all the 800 number on the back of the card and say so. They will mail you a check. You do not have that option once the agreement is accepted. You must do that before you use the card in any way or access the account management website. Once you have done either of those you have accepted the agreement and lost your ability to refuse it.

Due to lack of any basis, these claims can be easily disputed. Obviously this is time consuming and an annoyance.
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Clearing up my bogus newsletter incident wasn't easy or cost free. That's why I take such a hard line on this crap.
 
Rebates in general are an evil way to make you think you are paying less. They are banking on you not filling out the forms correctly or just forgetting to do it. Avoid rebates!
 
i stay away from rebates as some have never came but never expected them to so no big deal. if just happens that its a good deal and also has a rebate i might bite. so im wondering if you dont cancel the account do they still charge you a monthly fee after the card is finished? i usually cut a card in 4 pieces and throw each piece in garbage every other week.

I have also seen Russian mafia make credit cards with magnetic strip that look just like American express cards with the information stolen from overseas. (very impressive to me)
 
mikejustis said:
Rebates in general are an evil way to make you think you are paying less. They are banking on you not filling out the forms correctly or just forgetting to do it. Avoid rebates!
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This

Entitled money is nice, but why go through the time and hassle just for that $5-10. :eek:

Was giving an example of the amount, I had a friend who received $80 back but got this money through wasted time and couple of months.
 
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I was a big fan of OCZ rebates when they used to send out checks. They have always been very good about approving claims.

The one time I had a problem with a rebate I pm'd the OCZ rep here on Hardfoum. He gave me the email of someone at OCZ. I got a prompt response when I emailed the guy and he took care of the issue without me bugging him further. I was very impressed with their customer service.

When ddr2 prices were lower it was somewhat common to see OCZ rebates that nearly cut the price by 1/2. I bought a few sets with rebates like that. The savings were substantial on 4GB sets.

I like OCZ rebates and I'd like to take advantage of them in the future. I'm not sure that it's worth the hassle and risk of dealing with Citi Prepaids though.
 
mikejustis said:
Rebates in general are an evil way to make you think you are paying less. They are banking on you not filling out the forms correctly or just forgetting to do it. Avoid rebates!
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qft.

on another note last time I purchased ocz ram, pc 3200 gold sticks.

The rebate took almost a year to reach me :rolleyes:
 
So can someone summarize what to do with the Citi prepaid cards? Do you need to close them after use and if so how? Is just calling the number on the back as specified above best?

I have some from OCZ and some from Corsair right now.


and yes, rebates are made to be hard to obtain...that is how companies are able to offer the prices that rebates give out. No rebates = less of a deal.
 
Grentz said:
So can someone summarize what to do with the Citi prepaid cards?
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If the card has been activated or used in any way (this includes using the website to check balance) you need to:

#1 Empty the card. The best place is your bank.
#2 Call the number on the back and speak to a person.
#3 Tell the service rep that you want to close the account.

If the card is brand new, unactivated, and has just arrived in the mail then you should "opt out" / "refuse the Citi Prepaid agreement" instead:

#1 Call the number on the back of the card.
#2 If the card is unused and unactivated then there should be a menu option to "opt out." If you can't find it then you need to speak to a person. Tell the service rep that you do not accept the Citi Prepaid agreement and that you choose to "opt out." The service rep should tell you that they will send a check.

This seems to be the safest because you never actually have an account with Citi Prepaid.

Note: If there isn't a voice prompt for talking to a service rep then choose the "change address" option. That should get you to human.

Wait a while and then call the phone number again. Once your account is actually closed you will be directed to a service rep as soon as you enter your card number. If you get to the main menu your account is still open. I used this method to double check that my account was closed. Mine was closed within minutes of talking to the rep.
 
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kristof said:
I called the number on the back of the card: 1-800-522-7458 After entering the card's number I chose the "change address" option from the main menu. I think it was #2. That got me to a live CSR. I confirmed my name and address with the CSR and told them to close my account.

That's how to close a Citi Visa Prepaid Card from OCZ. The process for closing other cards may differ.
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Worked perfect for my Citi Corsair cards. They were able to do both at the same time for me in fact (asked for my info/address, I asked them to close the first, then I gave them the second card number and the rep closed that for me too.).
 
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