Class Actions 101: Misleading Advertising, Discount and Other Statements

• Author: Mary Singleton
• Posted: 2024-05-07

An arbitration investigation into advertising and discount practices recently began against Eddie Bauer after repeated complaints by consumers that the clothing store chain presented fake discount information on its website. This is not the first time that shoppers have accused a retailer of exaggerating or purposely misleading consumers. In fact, it happens quite often.

Read on to learn everything you need to know about this particular case and similar ones like it, and how you can protect yourself and seek recovery of any overpayments you make:

The Eddie Bauer Case

What Did Eddie Bauer Claim?

Customers of Eddie Bauer have accused the company of misleading them in two ways: It claims to constantly offer 30% to 50% discounts off products sold on the website, but website prices aren't discounted below the normal in-store prices. Instead, website users pay store prices when told they're receiving discounted ones. Customers also accuse Eddie Bauer of displaying abnormally high increased list prices on the website to make users believe that they're getting great deals when they receive discounts.

What's the Class Action Status?

Eddie Bauer website customers can't simply sue the company as a group in a class action lawsuit to receive back the money they lose as a result of overpayments. The website's Terms of Service, which every customer agrees to when they set up an account, makes it clear that any customer who sets up an account can't start a class action against the company. They must instead seek private arbitration individually so that a private organization chosen by Eddie Bauer decides the case instead of a judge or jury.

Thinking Outside The Box

At least one law firm currently partnered with a class actions organization plans to file arbitration cases individually for any website customer who comes forward with a case. They're urging everyone who has experienced this specific problem with Eddie Bauer to come forward so that they can file as many cases as possible with the American Arbitration Association. That way, if Eddie Bauer refuses to agree to arbitration and repayment of monies to customers, the individuals who lose their cases still have a class action opportunity. The law firm can file a class action lawsuit without representing them based on Eddie Bauer's refusal to follow its own TOS when a large group of consumers have been harmed.

Alternative Actions You Can Take

Reporting to Officials for Investigation

You can prevent this type of fraud in a variety of ways. Consumers can report instances of false online advertising and other statements at local, state and federal levels. They can speak with members of their Chamber of Commerce. They can file a complaint with their state's Attorney General. They can also file one with the U.S. Federal Trade Commission. Any instance of false statements can be reported. That said, it's best if you can provide evidence of a company's wrongdoing in the form of copies of emails, screenshots or video.

Telling Everyone About Your Experiences

You can also prevent and reveal this type of online fraud through word-of-mouth reporting to friends, family, co-workers and others in your social networks and online. Companies don't want anyone to notice these types of shenanigans. You can usually bring about a positive change faster by speaking out publicly and loudly about your negative consumer experiences with false or misleading advertising or other statements.

For example, the Giant Eagle grocery store chain in Maryland, Ohio, Pennsylvania and West Virginia tried to make false savings claims via email this year to reduce how much their customers saved with fuel and grocery discounts. They presented a new free loyalty program, myPerks, as a dollar-based savings alternative to their percentage-based FuelPerks program. These emails promised greater fuel and grocery savings, faster doubling and tripling of points and free Pro status for 90 days. Yet, their primary savings claim turned out to be false:

Customers realized with a bit of math that anyone who uses FuelPerks for a discount off a single grocery order of several hundred dollars receives far greater savings (i.e. sometimes $50 or more) than if they switched to myPerks. The FuelPerks program provides up to 20% off a single order, depending on when the customer chooses to use their discount. MyPerks provides only $1 off for every 50 accrued points based on one point per dollar spent. These customers have been warning members of their social networks and even their neighbors and strangers through sites like Facebook, Nextdoor, Reddit and Twitter. Giant Eagle eventually agreed to extend the existing perks/points expiration date and restore FuelPerks membership upon customer request.

Things to Keep in Mind

False and misleading statements by retailers can occur at any time and in any format. They can involve online store prices or emails in which a company attempts to convince its customers to switch to a different loyalty program. You can protect yourself from these attempts by staying up to date on new arbitration and class action cases and using a bit of common sense whenever you feel like a "deal" seems too good to be true. If a company successfully misleads you, it's important to remember that you have more power than shopping elsewhere. You can pursue justice via arbitration, class action, official consumer protection agencies and even public outcry.