Under Armour faces new proposed class action lawsuit over 'false discounting scheme'

Under Armour is under the microscope once more, as the sportswear brand faces a new proposed class-action lawsuit alleging it uses a "false, misleading and deceptive pricing scheme" across its Under Armour Factory outlet stores and website.

According to Linda Rappaport, a New York resident who filed the complaint in the state's Eastern District Court on October 29, Under Armour produces merchandise exclusively for its outlet stores and website. The assortment's quality is said to be inferior to that of the items sold at its regular store and website, meaning that Under Armour falsely promises "huge savings and high value" with its discount store advertising.

Under Armour faces new allegations of deceptive discount practices at its Factory Outlet store

"All, or virtually all, of the merchandise sold at Under Armour Factory outlet stores, is manufactured for and sold exclusively at Under Armour Factory stores," reads the complaint, according to an article published in Sourcing Journal. The complaint goes on to note that close to none of the merchandise in Under Armour's Factory outlet was ever a part of the brand's regular store assortment.

Although factory outlet store items are not available in standard retail outlets, they carry tags displaying the "MSRP" — the manufacturer's suggested retail price. Similarly, products on Under Armour's outlet website feature an original price that's crossed out beside a lower, discounted price. In the proposed class action lawsuit, Rappaport contends that these tags and price reductions skew customers' perception of the item's true value, as they are influenced by misleading price comparisons.

"The Under Armour Factory products sold in both the brick-and-mortar Under Armour Factory stores and [on the outlet site] are never—or virtually never—offered for sale or actually sold at their 'original' or 'price tag' prices. The reference prices and accompanying 'discounts' are therefore fraudulent and used solely to induce consumers to make purchases and spend more under the reasonable, but incorrect, belief that the merchandise was once sold at its advertised reference price," continues the counsel for Rappaport in the complaint.

In the filed complaint, the attorneys and Rappaport claim that consumers believe they are being offered a discount when purchasing an item from Under Armour's outlet stores or website based on the advertising and marketing tactics used, which is false. "[Under Armour's] fake discount scheme is intended to (and does) increase [its] sales while depriving consumers of the benefit of their bargain and causing them to spend more money than factory outlet store items are actually worth," stated the complaint.

Rapport and the attorneys accused Under Armour of violating the New York False Advertising Law and the New York Consumer Protection From Deceptive Acts and Practices Act with its false discounting scheme. Rappaport and her legal team propose a class action lawsuit representing "hundreds of thousands of individuals" across New York State who bought one or more items from an Under Armour factory store during the specified timeframe.

The plaintiff, Rappaport, is now calling for a jury trial and is pursuing declaratory and injunctive relief, along with actual, punitive, and statutory damages for herself and all class members involved. The news comes after a comparable class action suit brought against Under Armour in 2020, which alleged that the brand displayed artificially high "original prices" on discounted items at its outlet stores, creating the impression that shoppers were receiving a significant discount.