Too Good A Deal? JC Penny Hit With Class Action Suit Over False Reference Pricing

Competition in the world of online sales is intense, but companies that used inflated original prices to lure customers face consequences.

JC Penny, for example, has been hit with a class action lawsuit in the Southern District of California over its alleged advertising practice of using "false reference pricing." The three-count complaint claims the nationwide retailer violated California's Unfair Competition Laws, False Advertising Laws, and Consumer Legal Remedies Act because of its supposed sale pricing practices. Do the claims have merit?

The plaintiff, Maria Carranza, contends that JC Penny is engaging in a scheme to fabricate false "original" (or "reference") prices before offering products for sale at a supposed "discount." Carranza claims that JC Penny falsely advertises its products on its e-commerce website by listing a high reference price and the corresponding sale price. The issue? The products, Carranza claims, were never sold at the listed