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Shoppers Sue J.C. Penney Over False Sales

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J.C. Penney won’t be able to shake accusations that it offered shoppers deceptive discounts. On Monday a Los Angeles U.S. District Judge certified a class-action lawsuit against the retailer for those false sales.

The suit said J.C. Penney marked up retail prices on apparel and accessories to trick shoppers into thinking they were getting better discounts when the items were advertised on sale, Reuters reported.

It also accused the retailer of running a “massive, years-long, pervasive campaign” to deceive shoppers about its private-label pricing, and pricing for outside brands like Liz Claiborne.

J.C. Penney reined in its discounting under the leadership of later ousted CEO Ron Johnson in favor of everyday low prices but resumed the practice after his tenure and seeing sales tumble.

Cynthia Spann, the lead plaintiff in the class, said she purchased three blouses for $17.99 each, 40 percent off the “original” $30 price and discovered that, in the three months prior, the price had never been above $17.99.

Judge Fernando Olguin said it was possible “in one stroke” to determine whether J.C. Penney’s advertising practices caused California shoppers to buy goods based on discounts that weren’t real.

“We’re thrilled with the decision,” Reuters reported Matthew Zevin, a lawyer for the plaintiff class, as saying. The case, he said, could number hundreds of thousands. “Price comparisons are not illegal, but it is deceptive if there is no basis for the original price.”

Similar suits have been filed against Kohl’s, Men’s Warehouse and Jos. A. Bank, according to Reuters.

Olguin certified the class of plaintiffs who bought private-label or exclusive items at discounts of at least 30 percent from J.C. Penney between Nov. 5, 2010 and Jan. 31, 2012. The shoppers are accusing the retailer of violating consumer protection laws.

Federal Trade Commission (FTC) rules on deceptive pricing say a product should be openly and actively offered for sale for a “reasonably substantial period of time” before being discounted—provided that the original price is genuine—in order for the bargain being advertised to be a true one.

J.C. Penney has not commented on the pending litigation.

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