Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Overstock.com sued for overstating discounts

By Annalyn Censky, staff reporter


NEW YORK (CNNMoney.com) -- A group of district attorneys in California is suing Overstock.com for $15 million, accusing the online discounter of overstating its deals and misleading consumers.

The attorneys filed a 33-page complaint in Alameda County Superior Court late Wednesday, arguing that Overstock.com (OSTK) should pay a minimum of $15 million in fines and restitution for "routinely and systematically" making untrue and misleading claims about the prices of its products.

The lawsuit cites an example where Overstock allegedly advertised a patio set for $449.99 and claimed that the "List Price" for the set was $999. But the furniture arrived with a Wal-Mart sticker showing the price to be $247.

The complaint accuses Overstock of often making up "list prices" and "compare at prices."

"In our opinion, this conduct constitutes untrue or misleading advertising, and legal action is necessary to protect our consumers from such practices," District Attorney Dolores A. Carr. said in a statement.

Overstock fired back with a statement of its own, claiming it has been in discussions with the attorneys for several years and was disappointed the conflict resulted in a court case.

"Overstock.com stands by all our advertising practices, including providing comparison values which we thoroughly explain on our site," Jonathan Johnson, President of Overstock.com said in a statement. "We have been singled out for standard industry practices, which we look forward to demonstrating in court."

The lawsuit seems to come at a "strategically-timed moment," Overstock said. Black Friday, one of the largest shopping day of the year, is next week. To top of page

Index Last Change % Change
Dow 16,204.97 -211.61 -1.29%
Nasdaq 4,363.14 -146.41 -3.25%
S&P 500 1,880.05 -35.40 -1.85%
Treasuries 1.85 -0.02 -0.86%
Data as of 8:43am ET
Company Price Change % Change
Bank of America Corp... 12.95 -0.30 -2.26%
Facebook Inc 104.07 -6.42 -5.81%
Freeport-McMoRan Inc... 5.68 -0.04 -0.70%
Microsoft Corp 50.16 -1.84 -3.54%
General Electric Co 28.54 -0.64 -2.19%
Data as of Feb 5
Sponsors

Sections

Anheuser-Busch has been the exclusive beer advertiser featured during the Super Bowl since 1975, and it's spent more on Super Bowl advertising than any other company for the last five years in a row. More

It was the first offer the South American nation has made to the holdouts which in Argentina are called "vultures." More

Laurie Segall sits down with Foursquare's new CEO Jeff Glueck to discuss the company's latest round of funding at a lower valuation, and their hybrid consumer/enterprise business model. More

Nonprofit JumpStart has launched a new $10M fund that will only invest in women and minority-led startups. The catch: You have to move to Ohio. More

Portland, Oregon, is often described as the last affordable cool city on the West Coast. But as more people move to the city, it's becoming increasingly unaffordable. More