In a recent Bloomberg Law article, Thompson Coburn attorneys Luke Sosnicki, Kim Bousquet, and Joseph Scott delve into the issue of phantom discounting—a practice prohibited under California's False Advertising Law for misleading consumers with deceptive pricing.
"To ensure that sales are genuine," they explain, "California bans using advertisements that purport to convey a former price of a product unless that former price was in fact the prevailing market price for the product within the three months preceding publication of the advertisement (unless the advertisement explicitly specifies when the former price last prevailed)."
The TC authors highlight how courts have been hesitant to dismiss phantom discount cases at the pleading stage. "But while most cases are settling, either before or after court orders adverse to the defendants, not all are meritorious. Plaintiffs sometimes bring these claims based on a misunderstanding of the advertised pricing," they wrote.
Read the full article here.