Ranting over RefundsBy Mike Luery

By Mike Luery

SACRAMENTO (CBS13) — A popular program to recycle old appliances has been plagued with problems. Consumer rebates have been delayed, but the state agency in charge is paying out even more money to the private contractor.

Federal stimulus funds have been driving the Cash for Appliances program, designed to replace and recycle old refrigerators, washers and dryers.

The rebate program has been successful in taking some 230,000 energy-guzzling appliances off the energy grid. But it has also created a backlog of botched paperwork that is costing all of us money.

The California Energy Commission has agreed to pay $74,500 – on top of a $1.2 million contract to First Carbon Solutions, a Pennsylvania firm hired to handle the rebates.

But the program has been riddled with errors.

“We’ve had to look at approximately 80,000 records,” said Amy Morgan, a spokesperson for the California Energy Commission.

So why is the Commission paying the extra $74,500 when many consumers are still waiting for their rebates?

“We went out and retained the services of temporary staff to keep this program going,” explained Amy Morgan. “Just because the rebate contractor ended services, we couldn’t just stop the program,” Morgan told CBS 13.

So the Energy Commission spent an additional $12,400 – on top of the $74,500 to First Carbon Solutions, to hire college students to answer the phones – and talk to consumers like Cindy Cygan of Roseville. She bought a brand new energy efficient washer 12 months ago and was promised a $100 rebate. She’s finally been approved for a rebate, but is disturbed over the delays.

“They told me that everything I have done in the last 9 to 10 months doesn’t matter,” Cygan told CBS 13. “They are going to process my rebate. Yes they did have the right documentation but now it’s going to take 10-12 weeks.”

That’s on top of the 12 months she’s already waited.

Debbie Schweitz of Wheatland wants her $200 rebate, after buying a brand new refrigerator last July. She admits she forgot to include the serial number on her application, but told CBS 13 she didn’t know there was a problem with her rebate.

“It’s not going to happen now because I filled out the forms incorrectly. It says they sent a postcard to me. I never received the postcard,” Schweitz said.

The flood of applications has proven to be problematic. First Carbon Solutions sent a statement to CBS 13, saying, “The majority of errors in processing rebate applications resulted from a high volume of applications that were deemed ‘incomplete’ based on requirements set forth by the CEC and the federal government. Throughout the program, we followed the detailed direction from the CEC, as well as federal and state requirements, to process applications. Before the end of 2010, we conducted an audit that found an internal processing error rate of less than one percent. We have since addressed all known internal errors and reprocessed these applications for payment by the CEC.”

But even a one percent error rate amounts to roughly 2,300 processing errors – mistakes that have proven to be costly for consumers.

“I’ve done my part,” Cindy Cygan told CBS 13. “And they can’t seem to fulfill their part of it.”

The Energy Commission has paid out $27 million so far, in rebates for the Cash for Appliances program. But because of the processing problems – the Commission is looking at potentially holding back 10% of the contract with First Carbon Solutions – or about $120,000.

Consumers wanting information on their rebates can call the toll free hotline at 1 (888) 390-4034 Monday – Friday between 9 a.m. and 5 p.m.


You can also check on your rebate online at  http://cash4appliances.org/consumers/status.html

Send us your story ideas via e-mail to onthemoney@kovr.com. You can also follow On The Money stories in progress via Twitter at  http://twitter.com/#!/mikeluery

  1. Crash says:

    Another scam for the Rich to get richer

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