Lawsuit Investigation into Fake Sale Prices

Attorneys working with ClassAction.org believe some retailers may be violating consumer protection laws by tricking shoppers into thinking they’re getting better deals on products than they really are.

Specifically, it’s believed that these stores and websites may be perpetually listing their products as on sale from a higher “regular” price that the items were never actually sold for or advertising “limited time” deals for products that are almost always on sale.

If so, it’s possible that class action lawsuits could be filed to help consumers get some of their money back.

Fake Markdowns: What’s the Problem?

Attorneys believe certain retailers may be breaking a federal law that states that an item marked as on sale from a higher, “regular” price must have been sold at that higher price for a reasonable amount of time.

According to the Federal Trade Commission’s (FTC) Guides Against Deceptive Pricing, when an advertiser markets a product using a price comparison, such as listing it at a discount from a former price, the reference price must be genuine to ensure that consumers are receiving the value they’re expecting. If the former price is inflated and the item was never, or only shortly, offered for that price, the apparent bargain “is a false one,” the FTC states.

“In such a case, the ‘reduced’ price is, in reality, probably just the seller’s regular price,” the FTC’s guide reads.

For example, Lenovo was hit with a proposed class action lawsuit alleging the tech retailer misled consumers by advertising a strikethrough “regular” price, such as $1,199.99, above an apparent sale price for most of its products. The case claimed, however, that the “vast majority” of Lenovo’s regular prices were false and deceptive since the products were not actually sold at those prices “for a reasonably substantial period of time.”

The FTC also warns sellers against making a “limited” offer that is not actually limited. The lawsuit against Lenovo, for instance, also argued that the retailer’s representations that its sales were only available for a limited time were misleading since the website almost always had a sale running.

When a consumer is misled into believing they are getting a good discount, they may make purchases they otherwise would not have made.

How Class Action Lawsuits Could Help

A class action lawsuit could help California customers get back money they spent on products that were advertised at a discount. A lawsuit could also force the retailers to change their marketing and advertising practices.

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