Overstock.com sued by district attorneys

Oakland Tribune November 17, 2010 | Paul T Rosynsky OAKLAND — Overstock.com, a popular online retailer that says it offers the cheapest prices on a many items, is being sued by seven district attorneys in Northern California, accusing the company of making untrue and misleading statements about pricing.

In a 33-page complaint filed in Alameda County Superior Court, the district attorneys argued that Overstock.com should pay, at a minimum, $15 million in fines and restitution for misleading customers about savings it said were offered on its website.

“Beginning no later than January 1, 2006, Overstock routinely and systematically made untrue and misleading comparative advertising claims about the prices of its products,” the civil complaint states. “Overstock used various misleading measures to inflate the comparative prices, and thus artificially increase the discounts it claimed to be offering consumers.” One example cited in the complaint: Overstock advertised a patio set on its website for $449. Overstock said the next best price for the patio set was $999.99, but when the furniture was delivered, it had a Walmart price sticker on it showing it was selling for $247. see here walmart price match

“Overstock’s misrepresentations about its pricing were likely to mislead consumers into believing that Overstock’s prices would always be significantly lower than the prices offered by other merchants for the identical products,” the complaint states. “Such misrepresentations were likely to discourage consumers from making the effort to search elsewhere for lower prices.” Mark Griffin, vice president and general counsel for Salt Lake City-based Overstock, denied the allegations in the complaint and said the district attorneys failed to understand how Overstock advertised its prices. in our site walmart price match

“No one is perfect. We do deny the allegations and we deny the interpretations,” Griffin said. “We do not deserve this, especially the timing of it.” Griffin said the patio set example cited in the complaint was an isolated incident and said that the company follows “standard advertising practices” informing its customers how it generates comparison prices to its products. He said the civil complaint was filed after negotiations between the company and the district attorneys failed to end in an agreement.

“We tell our customers what it means,” he said. “These (district attorneys) have taken the position that they don’t think our customers understand.” The civil complaint was filed by district attorneys in Alameda, Marin, Monterey, Napa, Santa Clara, Shasta and Sonoma counties.

Paul T Rosynsky