Overstock.com accused of false advertising

November 18, 2010 7:03:46 AM PST
District attorneys across Northern California are accusing Overstock.com of swindling its customers out of millions of dollars. There are seven Northern California district attorneys who have now filed a civil complaint against Overstock.com.

When shoppers browse the popular online retail site, they often see claims like "unbeatable prices" and "best deal." Sometimes it shows a box listing product price comparisons of other retailers, but not everyone believes those are always honest statements.

The complaint against Overstock.com was filed in Alameda County superior court. It states that the online retailer is deliberately posting misleading and inflated price comparisons of its competitors, so it appears to be offering consumers even greater discounts. The seven DA's are asking that Overstock pay at least $15 million in fines and restitution for misleading customers about purchase savings. The lawsuit also seeks an injunction to block Overstock's pricing comparisons.

The suit highlights an example of a purchase in 2007 when a man bought a patio furniture set for $449 on Overstock. The website claimed the next best price from other companies was about $1,000. But when the set was delivered, it had a Walmart price sticker on it for $247. Overstock insists that was an isolated incident and that it follows standard advertising practices.

In response to that patio set pricing snafu and the accusations of misleading pricing, Overstock says: "No one is perfect. We do deny the allegations and we deny the interpretations. We do not deserve this, especially the timing of it."

The bad timing is that these accusations about pricing are going public just as consumers are gearing up for the holiday shopping season and every retailer is vying for those dollars in this still-tough economy.


Load Comments