Zara has recently been hit with a five-million-dollar lawsuit for deceiving customers with its alleged deceptive pricing practices. The suit was filed by lawyer Mark Geragos, whose firm (Geragos & Geragos) is investigating Zara’s deceptive pricing that makes their customers overpay for the products they purchased.
The complaint has also claimed Zara for unjust enrichment, unfair business practices, and fraud. The company has been claimed to conduct the bait-and-switch pricing practice that makes customers pay a higher tag amount. According to the firm’s lawsuit, Zara’s pricing tags are only in Euros, which causes confusion for many U.S customers. The firm claims that Zara will sell to their customers a higher converted euro to dollar price, meaning that the product price is never converted with today’s foreign currency rates.
They also claim that Zara also deceives their customers by using the cover-up pricing practice, where the Euro price is covered by a dollar sticker sign. In these instances, a customer pays for the euro price rather than the true dollar amount, making the product a lot more expensive.
The 26-page suit continues to claim the company is violating State and Federal law by taking advantage of their customer’s by tagging their products with a foreign currency and tricking them into thinking they were paying less.
The legal document also goes on to reportedly claim Zara is conducting a deceptive corporate policy to misinform consumers who ask why they bought their products for more than the tag price. Zara customers are told that the markup is based on the conversion rate at the time the clothing/product was manufactured and assures them that currency rates change drastically all the time.
The law firm Geragos & Geragos started investigating the company after a man named Devin Rose gave them detailed information on the price deception. Rose reportedly purchased three t-shirts this year at his local Zara retail store, each displaying a 9.95-euro price on the t-shirt tags. Although when Rose paid for his three shirts, he discovered that he was charged $17.90 for each shirt. With a further investigation, the firm commented that on average customers are overpaying 5-50 dollars more for their products with these deceptive pricing policies.
Zara released a statement saying that the company denies that they conduct these deceptive pricing practices and that the firm’s proof of fraudulent pricing is baseless.
