The Verizon-Citi Visa Scam

11/09/2009 05:12 am ET | Updated May 25, 2011

My BlackBerry 8830 died a painless (to me) death this summer, so I went to a Verizon wireless dealer in Rhode Island to see if it could be fixed. No. So I got a new BlackBerry 9630, which I really like, especially because I got a $100 rebate - until I actually got a notice of the rebate.

I still like the Blackberry, but I hate Verizon's rebate scam. Instead of a check for $100, I got a Citi Bank Visa card with these messages: "Here's your Verizon Wireless Rebate Card - Use everywhere Visa debit cards are accepted!"

I don't want a frigging debit or credit card; I want my $100!

But the letter said these were my options to get my money: "Rebate Card: Use the attached rebate card instantly everywhere Visa cards are accepted; Bank Transfer: Go online to move rebate funds to your bank account; Cash With Card: Use your card to cash by taking your card and identification to any Visa member bank (see package insert for details); Paper Check: Go online to get your rebate funds via paper check to deposit or cash at your bank."

In other words, I had to go to a lot of trouble not to accept a Visa card that I don't want. After getting bailed out by the government to the tune of around $300 billion, Citi is finding new ways to get high-interest rate credit cards in people's hands. Here's what a February 28 Wall Street Journal article noted:

The taxpayer never sleeps when it comes to Citigroup, which yesterday got its third rescue in recent months from Uncle Sam. The amount and terms of the taxpayer commitment keep changing, while the management stays in place. The only institution that has a comparable track record on those two scores is Congress.

We don't mean to laugh, but we have to in order not to cry. No company on Earth has failed more often than Citigroup without being put out of its misery. Taxpayers have already put more than $50 billion in capital into the bank, while guaranteeing $301 billion of its bad assets, and the bank still can't stop its slide.

In a better world, Citi would have long ago been put into bankruptcy. The FDIC could have taken over and disposed of the bank's assets, while protecting insured deposits as it always does. The profitable parts of Citigroup could then have been sold off to people who could better manage them.

So how is Citi going to pay the government back? One way is to find new, underhanded ways to get Visa cards into people's wallets. Citi probably paid Verizon something to have the phone company send rebates in the form of debit cards. Verizon saved money by not having to pay postage, buy envelopes, or cut a check. Citi gets millions of cards in people's hands.

Just what the country needs in the middle of a debilitating recession that was caused by, among other things, too much consumer debt, too high interests rates on that debt, and by greedy bankers.

I wouldn't have been so upset if, at the time I bought the new phone, the clerk who told me about the rebate had asked me if I wanted the rebate in the form of a check or Visa rebate card. In other words, if I had had a choice.

I called Verizon outraged and the Verizon service person was very nice and polite and filled out the online form to get my check in the mail. So I was somewhat mollified, but I still believe this is a scam that shoves unwanted and unneeded Visa cards in unsuspecting people's hands and that an ethical, transparent, customer-focused company should give people a choice about accepting a Visa card.

But I don't hear a lot of people using the adjectives ethical, transparent, or customer-focused to describe Verizon or Citi Bank. This current scam isn't going to up the count.