LA prosecutors sue giant retailers for deceptive pricing

Los Angeles prosecutors on Thursday announced they had filed lawsuits against retail giants JC Penney, Sears, Kohl's and Macy's for misleading shoppers into believing thousands of products were on sale at deep discounts.

The suits allege the retailers illegally engaged in the business practice known as "false-reference pricing" to make customers believe they are "getting a good deal."

For example an item can be advertised as being on sale for 50 percent of the original price, even though the retailer never sold it at that original price.

"Customers have the right to be told the truth about the prices they're paying -- and to know if a bargain is really a bargain," said Los Angeles City Attorney Mike Feuer in a statement.

"My office will fight to hold retailers responsible for their practices and to ensure consumers can make informed choices when spending their hard-earned money."

Sears and JC Penney representatives declined comment on the litigation. Kohl's and Macy's did not reply to a request for comment.

The lawsuits said that the alleged false advertising schemes used by the four companies were part of their overall marketing and business strategies to boost earnings.

Under California law, retailers are banned from advertising a higher original price for an item unless the product was actually sold at that price within three months of the advertisement.

Stores can also tout a higher original price if an ad "clearly, exactly and conspicuously" mentions the date of said price.

The lawsuits list many of the items offered at phantom discounts including purses, maternity clothes, jewelry and household items.

In April, for example, Sears started selling a Kenmore washing machine with a "regular" price of $1,179.99 and a "sale" price of $999.99, even though the appliance was never on sale at the higher price.

In May, Macy's for its part offered a sterling-silver necklace for $30, down from the "original" price of $120. However the necklace was never on sale for $120.

The lawsuits seek injunctions to prohibit such advertising and civil penalties of up $2,500 for each violation.

JC Penney and Kohl's were previously hit with similar lawsuits in California that accused them of fake markdowns on retail items to trick customers into believing they were getting big discounts.

JC Penney in 2015 settled a class-action suit by agreeing to pay $50 million. The funds were distributed to affected California customers in the form of cash or store credit.

Kohl's earlier this year agreed to a $6.15 million settlement in a similar case.