November 17, 2010
DISTRICT ATTORNEYS SUE OVERSTOCK.COM, INC., FOR FALSE ADVERTISING AND UNFAIR BUSINESS PRACTICES, SEEK INJUNCTION, RESTITUTION, AND $15 MILLION IN CIVIL PENALTIES
Marin County District Attorney Edward Berberian announced today that his office, in conjunction with the District Attorneys of Alameda, Monterey, Napa, Santa Clara, Shasta, and Sonoma Counties in California, filed a civil lawsuit in Alameda County Superior Court today against internet retailer Overstock.com, Inc. ("Overstock"), seeking a permanent injunction and $15 million in restitution and civil penalties. Overstock is accused in the complaint of "routinely and systematically" making untrue and misleading claims about the prices of its products since January 1, 2006.
In one example cited in the lawsuit, Overstock advertised a patio set for sale for $449.99 and claimed that the "List Price" for the patio set was $999.00 and that the consumer was saving $549.01. When one consumer ordered and received the patio set it came with a price tag from Wal-Mart showing the patio set sold there for $247.00. Overstock claimed the consumer was saving 55% off the "List Price," when in fact Overstock charged the consumer 82% more than the actual price listed on the product.
The lawsuit alleges that instead of comparing its current selling prices called "Today's Price" with actual prices charged by other merchants, Overstock often made up a comparison price called "List Price" or "Compare at" price based on arbitrary markups on Overstock's cost for the product. The lawsuit also alleges that in the case of items purportedly unique to and sold only by Overstock, Overstock fabricated a comparison price. In both instances, Overstock claimed a savings to the consumer off the fictitious comparison price.
"The Marin County District Attorney's Consumer Protection Division is committed to protecting consumers from false advertising and unfair business practices. The ability of the internet to disseminate false and misleading statements on a grand scale makes cases such as this important to prosecute in the public interest.," said Mr. Berberian.
Contact person(s): Andres H. Perez, Marin District Attorney's Office (415) 473-6450
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