City of LA Calls Out Major Retailers For Deceiving Customers

The City of Los Angeles has taken a stance against false and misleading sales practices by major retailers.  Recently, the city attorney slapped J.C. Penney, Sears, Kohl’s and Macy’s with false advertising lawsuits. The complaints, substantially similar in many respects, allege in sum and substance that the defendant retailer “creates an illusion of savings” as it “deliberately and artificially sets the false reference prices high so that customers feel that they are getting a bargain when purchasing products.” The complaints provide numerous examples of these purported exaggerated sales.

According to the complaints, these misleading practices violate California false advertising law.  The California consumer law mandates that listed “former prices” cannot be advertised unless that former price was the prevailing market price within the three months preceding the sale advertisement, California Business & Professions Code § 17501. The complaints note that on numerous occasions, on the first day a new product is listed online, the retailer reflects an “original” price and a “sale” price even though the retailer never offered that product for that supposed “original price.”  The complaints allege that this deceptive conduct not only violates California false advertising law, but also contradicts the retailers’ representations in past settlement agreements agreeing to cease such sale practices.

Disclaimer: The foregoing in no way constitutes legal advice from any attorney or from Faruqi & Faruqi, LLP. The opinions expressed herein are the opinions of attorney Ben Heikali and in no way reflect the opinions of Faruqi & Faruqi, LLP.

About Faruqi & Faruqi, LLP

Faruqi & Faruqi focuses on complex civil litigation, including securities, antitrust, wage and hour, and consumer class actions as well as shareholder derivative and merger and transactional litigation. The firm is headquartered in New York, and maintains offices in California, Delaware and Pennsylvania. Since its founding in 1995, Faruqi & Faruqi has served as lead or co-lead counsel in numerous high-profile cases which ultimately provided significant recoveries to investors, consumers and employees.

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About Ben Heikali

Ben Heikali is an Associate in Faruqi & Faruqi, LLP’s Los Angeles office. Mr. Heikali focuses his practice on consumer class actions, representing plaintiffs in a variety of consumer fraud and false advertising cases. Please feel free to contact Mr. Heikali regarding any questions concerning this blog post or any questions related to F&F’s practice areas.

Posted by Ben Heikali

Partner at Faruqi & Faruqi, LLP
California Office
Tel: (424) 256-2884
Fax: (424) 256-2885

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