December 22, 2016
Authored by: BCLP and Merrit Jones
Retailers that advertise sale prices in comparison with regular prices in California should ensure that the products were actually offered for sale at those regular prices within the preceding three months, in order to avoid potential litigation.
Los Angeles prosecutors have sued four national retailers for allegedly failing to do just that, accusing them of misleading shoppers into believing they got bigger discounts than they actually did by falsely stating the original prices in advertising sales prices on thousands of products.
The lawsuits assert false advertising and unfair competition based on alleged violation of a state law that prohibits advertising a former price unless it was “the prevailing market price” within three months before the ad runs, unless the ad “exactly and conspicuously” states the date when that price was in effect. California law also prohibits as a deceptive practice “[m]aking false or misleading statements of fact concerning reasons for, existence of, or amounts of price reductions.”
“Customers have the right to be told the truth about the price they’re paying – and to know if a bargain is really a bargain.” City Attorney Mike Feuer said in a statement.
The lawsuits, which were filed in Los Angeles County Superior Court, seek civil penalties as much as $2,500 for each violation and injunctions to stop so-called false reference pricing to increase sales.
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