County DA Sues Overstock.comJoining with other district attorneys, civil suit claims false advertising and seeks a permanent injunction and $15 million in restitution and civil penalties.
By Nancy Isles Nation | Email the author | November 21, 2010 Add a comment (0 comments )
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The Marin County District Attorney's Office is joining other Northern California counties in a civil lawsuit filed Wednesday against Overstock.com, an Internet retailer.
District Attorney Edward Berberian said that the lawsuit is asking for a permanent injunction and $15 million in restitution and civil penalties.
Berberian said Overstock "routinely and systematically" makes false and misleading claims about the prices of its products and has been since January 2006.
In one example, Berberian said, Overstock advertised a patio set for sale for $449.99 and claimed the normal "list price" for the furniture was $999. One consumer who ordered the set found a price tag from WalMart on the box, indicating the price was $247.
Berberian said Overstock claimed the consumer was saving $549.01, or 55 percent, of the "list price" when the retailer was actually charging 82 percent of the actual price.
The lawsuit alleges that instead of comparing its current selling prices, which it calls "today's price," with actual prices charged by other merchants, Overlook made up a comparison price and called it "list price," or said "compare at."
The lawsuit was filed in Alameda County by DAs in Alameda, Monterey, Napa, Santa Clara, Shasta and Sonoma counties in addition to Marin.
Overstock, based in Salt Lake City, said in response the the civil action that it provides retail value comparisons using standard industry practices.
"Overstock.com stands a by all our advertising practices, including providing comparison values which we thoroughly explain on our site," said Jonathan Johnson, president of the company. "We have been singled out for standard industry practices, which we look forward to demonstrating in court."
Johnson said the company has been working with the district attorneys offices to resolve the issue.
"We profoundly regret that these officials have chosen to file this lawsuit at what appears to us to be a strategically timed moment," Johnson said. "Regardless, we have confidence in the California courts to hear and fairly decide these issues."
Berberian said his office is acting on behalf of consumers in the county.
"The Marin County District Attorney's Consumer Protection Division is committed to protecting consumers from false advertising and unfair business practices," Berberian said. "The ability of the Internet to disseminate false and misleading statements on a grand scale makes cases such as this important to prosectute in the public interest."? |
