Yahoo Finance Zara Is Dealing With a $5 Million Lawsuit for "Deceptive Pricing"
Zara is facing some serious legal drama right now. Filing a $5 million lawsuit against the fast-fashion retailer, shopper Devin Rose is accusing the retail company of "deceptive pricing."
In the suit, Rose alleges that instead of pricing its merchandise in U.S. dollars, Zara often lists euros. Rose states that the brand uses significantly higher exchange rates for garments, leading them to charge more.
Rose claims to have been incorrectly charged at Zara's Sherman Oaks store in California this past May.
According to the lawsuit, "the actual euro-dollar exchange rate would have resulted in his €9.95 shirts costing approximately $11.26 each. Instead, however, Zara charged Mr. Rose $17.90 per garment, a markup of nearly 60 percent."
If Rose wins the lawsuit, this could potentially be a big payday for any other individuals in a "similarly situated" scenario. If customers have proof showing they were overcharged, they can join in on the case and share the settlement amount.
A spokesperson from Zara recently released a statement to the Fashion Law denying these claims:
Zara USA vehemently denies any allegations that the company engages in deceptive pricing practices in the United States. While we have not yet been served the complaint containing these baseless claims, we pride ourselves in our fundamental commitment to transparency and honest, ethical conduct with our valued customers. We remain focused on providing excellent customer service and high-quality fashion products at great value for our customers. We look forward to presenting our full defense in due course through the legal process.
Rose was still not here for it and released this statement in response:
Zara's response so far has been beyond bizarre and desperate. Their unlawful conduct is not up for debate, as anyone who goes into a Zara store in the United States can see with their own two eyes that Zara is pricing clothing in euros and charging consumers drastically above the lowest tag price in dollars which is illegal. U.S. laws require that a retailer charge the consumer the lowest tag price - not grossly inflated amounts using fake conversion rates. If Zara wants to double down on its duplicity, instead of acting like a responsible corporate citizen and fixing the mess of its own making, they should be prepared to face the wrath of the American consumer and the full force of the law.
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