Zara Hit with $5 Million Fraudulent Pricing Practices Lawsuit

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Fast-fashion titans Zara, who have previously been criticized for ripping off independent artists’ designs, now find themselves caught in a $5 million-plus lawsuit over allegedly deceptive pricing practices. As The Fashion Law reports, claims of “bait-and-switch pricing” have been filed against the Spanish-based clothing and accessories retailer.

The proposed class-action lawsuit, filed by Devin Rose in a Los Angeles federal court, asserts that Zara shoppers have been caused to overpay for garments due to the company’s deceptive pricing practices. Rose’s complaint sets forth claims of negligence, unfair business practices, unjust enrichment and fraud. “In the aggregate, the shopping experience of ordinary customers like Mr. Rose, have resulted in Defendant Zara being unjustly enriched to the tune of billions of dollars,” the lawsuit reads, per TFL.

The alleged deception is carried out primarily through “bait-and-switch pricing,” referring to many of Zara’s products being solely tagged with euro prices. The euro is a larger unit of currency than the American dollar, leading U.S. shoppers to falsely believe prices are less expensive. Consumers then do not discover the true cost of products until they arrive at the register, by which time the items have already been scanned, and shoppers are asked for payment. To make matters worse, the ultimately quoted USD prices do not accurately reflect conversions to the euro prices listed on tags, but are rather inflated amounts.

Rose uses a May 17 purchase as an example, where his €9.95 shirts should have come out to roughly $11.26 each with accurate conversion rates. However, he received a markup of nearly 60 percent when Zara instead charged Rose $17.90 per garment.

Zara’s lawsuit comes only a few months after Ticketmaster was sued for overcharging its customers. Similar to the ticket outlet’s refund vouchers, previous Zara customers could be eligible to receive a portion of the settlement money if the lawsuit is certified by the L.A. court. Zara representatives told TFL that they deny any deceptive pricing allegations and “look forward to presenting [their] full defense in due course through the legal process.”