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Zara accused of deceptive pricing in 5 million dollar lawsuit

By Vivian Hendriksz


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London - Spanish fashion chain Zara has found itself in legal hot water once more. The leading brand of fashion conglomerate Inditex faces a 5 million US dollar lawsuit and is accused of deceiving customers in the United States out of billions dollars through a giant pricing scheme.

The lawsuit, which was filed on Friday in California's Federal court by Mark Geragos from Geragos & Geragos, alleges that Zara USA has used fraudulent pricing practices which resulted in customers overpaying for their products. The complaint claims that Zara USA used two different methods to deceive customers - bait-and-switch practice and cover-up pricing method.

Zara USA accused of tricking shoppers using fraudulent pricing methods

The first practice is based on Zara's USA price tags, which are in euros and can cause confusion among US customers. According to the complaint, Zara uses its euro price tags to lure shoppers to the cash register as they believe they are paying less but then add price mark up during the currency conversion so the customer ends up paying more. The second method, cover-up pricing is similar in vein and accuses Zara of deceiving shoppers by covering up price tags with euro prices with dollar signs. The dollar price is much higher than the converted amount would be if it was based on the original euro price.

The legal documents, seen by the DailyMail, also accuse Zara USA of misinforming consumers who do ask why the cost of product is more than the price tag by attributing the markup to conversion rates, set at the time the product was made. Geragos & Geragos law firm first started investigating Zara USA pricing practices after being contacted by a Devin Rose and accuse Zara of using such fraudulent pricing practices across the country.

Zara USA denies deceptive pricing allegations

Zara USA denies all accusations made in concerns to deceptive pricing. "Zara USA vehemently denies any allegations that the company engages in deceptive pricing practices in the United States," said a spokesperson for Zara USA to FashionUnited. "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." Although Zara, which currently counts 71 stores across the USA, appears to be confident that it has remained true to its values, not everyone is satisfied with their initial response to the lawsuit.

"Zara's response so far has been beyond and bizarre and desperate," said Ben Meiselas, one of the attorneys at Geragos & Geragos to FashionUnited. "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. US 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."

Photos: Zara AW 16/17 campaign, Facebook

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