Greg Vance collected Futura Rewards for years. He received annual rebates, based on his spending, that he put into his daughter’s registered education savings plan (RESP) with Heritage Education Funds.
When he signed up for an MBNA MasterCard linked to Futura Rewards, he started getting payouts of $500 to $600 a year.
“My cheque usually arrived in April, but it didn’t come in 2012,” he says. “When I called customer service, I was told it was a bit late. Last November, when I asked again, I was told ‘Who knows?’ ”
Futura Loyalty Group, based in Toronto, had 350,000 members enrolled in the rewards program. About 50,000 of them were active in past two years.
On March 28, Futura sent an email to members saying it had gone into bankruptcy protection last fall and emerged on Feb. 1 of this year.
Under a court order, all liabilities were eliminated — including the balances that were in Futura Rewards members’ accounts.
“We are sorry about the recent events that have led to these circumstances,” the company said.
Lance was hoping to finance his 16-year-old daughter’s post-secondary education. She’s now in Grade 11.
While the $3,000 he saved in her RESP remains intact, he’s losing points earned from almost two years’ worth of spending with his MBNA card.
“I’m out more than $1,000 after the restructuring,” he says. “I continued to put as many new purchases as I could on the card to maximize my reward that will not be coming.”
Started in 2003 under the name KidsFutures Inc., the company was based on successful U.S. rewards programs such as Upromise and BabyMint, which helped build a college fund by directing spending to specific companies.
Wendy, who didn’t want to use her last name, joined in 2004. She didn’t get any news that Futura Loyalty Group had gone into protection under the Companies’ Creditors Arrangement Act (CCAA) in late 2012.
“Out of the blue, I received an email last week saying that any balances in Futura Rewards accounts would be eliminated. That’s $593.86 in my case,” she said.
After receiving her last payout in October 2011, she had set up her Futura account to have a cheque sent to her whenever she reached the $100 level.
“I’m still furious,” she said. “Had the company done what I had directed it to do, the amount in my account would have been less than $593.86.”
Futura’s shares used to trade on the TSX Venture Exchange (symbol FUT). Those who followed the markets may have seen a news release last October, saying the financially troubled firm was seeking a buyer.
In a release on Feb. 1, Futura said it had sold assets related to the Aeroplan business to Advantex Marketing International Inc. of Markham, Ont. (In 2009, it had signed a deal to offer Aeroplan Miles to smaller retailers.)
The Futura Rewards business was sold to Pong Marketing and Promotions in Woodbridge, Ont., which sells long-distance phone cards. All of the existing directors resigned at Pong’s request.
The offer to buy the Futura Rewards business was contingent on not having to cover debts, said Adam Fisher, a bankruptcy trustee with Harris & Partners Inc., which supervised the restructuring.
“This is typical in insolvency proceedings,” he said. “Such offers are almost always conditional upon the issuance of a court order declaring that the assets be free and clear of any liabilities.”
Futura Rewards members were unsecured creditors, so they ranked below secured creditors in distributing sale proceeds. But in this case, even the secured creditors suffered a shortfall, Fisher told me.
In compliance with court orders coming out of the CCAA proceedings, MBNA ended its affinity relationship with Futura on Jan. 31.
MBNA will provide affected credit card customers with a new rewards plan and will honour points earned from Feb. 1 onward, said Cathy Velazquez, a spokeswoman for the card issuer (now owned by TD Bank Group).
Futura Rewards members can call the company at 1-866-728-3454, she said.
Loyalty programs are often a better deal for the companies that offer them than for members. Even if the sponsor stays in business, it can change the rules with only a few months’ notice.
Both Aeroplan and Air Miles have added activity rules and expiry dates, which will zap the points you collect if you’re not paying attention.