S.K. Chamber backs local ‘CertifiChecks’

SOUTH KINGSTOWN – The South Kingstown Chamber of Commerce “will stand 100 percent behind its gift certificate program,” its board of directors announced.
The multi-store prepaid certificates, promoted by the Chamber as part of its Shop South County initiative, were issued by Dayton-based CertifiChecks Inc. But the company – which managed similar programs in 47 states, more than 20 of them in cooperation with local Chambers of Commerce – has ended operations, saying it is filing Chapter 7 bankruptcy protection.
“This program has been a boom to local business, and we intend to continue to honor those certificates that carry our name,” said Lisa Roy, the South Kingstown Chamber’s interim director. The unanimous decision came during an emergency meeting yesterday, the Chamber board said.
Merchants belonging to the local Chamber are asked to continue to honor gift certificates bearing its name. Instead of depositing the “CertifiChecks” at their financial institution – where they will not be honored – they may redeem them at the Chamber office at 230 Old Tower Hill Road, Wakefield, which is open weekdays from 9 a.m. to 4:30 p.m.
Shoppers who hold gift certificates purchased through the South Kingstown Chamber “are encouraged to continue to shop locally with full confidence that the certificates will be honored,” the group said.
“Our Chamber was shocked and disappointed to learn that CertifiChecks filed for Chapter 7 bankruptcy, and that the prepaid funds were no longer available to cover the gift certificates currently in the community,” said Paula Spirito, who chairs the board of the South Kingstown Chamber.
CertifiChecks states on its Web site that, “due to an extremely difficult economic environment, [it] will no longer administer gift certificate programs.” It therefore directs merchants to remove all door and cash-register decals for the program and warns that gift certificates issued by CertifiChecks should not be deposited in the bank, “as they will be returned.”
Instead, the company says, such certificates may either be submitted by mail to the Dayton-based company, at the address on the CertifiChecks site, to be turned over to the court-appointed trustee for potential reimbursement; or held for later filing as a claim in the company’s Chapter 7 liquidation case before the U.S. Bankruptcy Court for the Southern District of Ohio, Dayton Division. All certificates, whether mailed to the company or submitted directly to the court, will receive the same treatment, the company said.
“There are funds that will be turned over to the Bankruptcy Trustee to pay claims submitted by certificate holders,” CertifiChecks added. But the company did not specify the amount of those funds, or of the gift certificates outstanding.
Ohio Attorney General Richard Cordray warned, however, that if CertifiChecks is allowed to file for bankruptcy protection, consumers submitting certificates for reimbursement may receive “only pennies on the dollar.”
Cordray announced late yesterday, on SpeakOutOhio.gov, that he has filed a lawsuit against the company, accusing it of misleading consumers and failing to honor the certificates. He is asking the Montgomery (Ohio) County Court of Common Pleas to hold the company responsible for reimbursing consumers and to impose a civil penalty of at least $25,000.
The South Kingstown Chamber of Commerce is a nonprofit business-advocacy alliance, based in Wakefield, with more than 700 nonprofit and for-profit member institutions across southern Rhode Island. For more information, visit www.SKChamber.com.
Information from the U.S. Bankruptcy Court for the Southern District of Ohio is available at www.ohsb.uscourts.gov.