It has been mentioned elsewhere, but I have not found a specific thread dedicated to this - and I think we want to keep abreast of this item.
Rewards Network / iDine was sued May 2004 by a group of California restaurants claiming they were loan sharked, essentially, as the corporation is (they claim) advancing money as a loan, but is unlicensed to do business as a lender in California and is in essence charging over 10% interest maximums allowed unlicensed lenders.
The restaurants have pressed a class action suit that they believe will be worth $250 million to them, as they see the "advances" as loans with short repayment periods and 100% interest rates. Stroock & Stroock & Lavan LLP is representing Rewards Network, and according to the Los Angeles Business Journal (pay article) on May 1, they have declined to comment. The restaurants are represented by Quinn Emanuel Urquhardt Oliver & Hedges LLP, and the suit was certifed as a class action October 2005.
Theoretically, the suit could go to court October 2006, though both parties have filed for summary judgment. I believe this one is worth keeping our eyes on, needless to say!
An article in the August 29, 2005 "Nation's Restaurant News" says, in part:
"...The case was first filed in state court here in May 2004 by the local restaurateurs, who claim the Chicago-based defendant, operating as iDine Restaurant Rewards Network Inc. and Transmedia Restaurant Co., preys on financially vulnerable operators. The plaintiffs said Rewards Network extends cash advances that must be repaid with 100-percent interest in the form of food-and-beverage redemptions by its dining-club members.
Pressing the litigation are Tournesol Bistro in Studio City, Calif. owned by Patrice Lambert; the now-defunct Gray Whale in Malibu, Calif., owned by Thomas Averna; and Minibar Lounge in Studio City, owned by Rebekah Barrows. They contend that California law prohibits non-licensed lenders from charging interest exceeding 10 percent..."
http://www.findarticles.com/p/articl...9/ai_n15341273