Under Armour Class Action Alleges Fake Sale Prices

A class action lawsuit claims Under Armour’s outlet stores advertise inflated “original prices” to lead customers to believe they are getting bargains.

The Under Armour class action lawsuit, filed by Matilda Dahlin of Santa Barbara, Calif., claims the athletic apparel company uses the “deceptive business practice of advertising fictitious ‘original’ prices and corresponding phantom discounts on Under Armour-branded outlet merchandise.”

According to the Under Armour class action lawsuit, Dahlin purchased workout clothes in October 2019 at the company’s Citadel Outlet in Commerce, Calif. The two items she chose were clearly tagged with significant markdowns of 40 percent and 50 percent, the plaintiff says.

“Under Armour represents to consumers its Outlet Merchandise’s original price on the product’s price tag. Under Armour then publishes the proffered discount as a percentage off (i.e., 40% off) of the original price,” reads the Under Armour class action lawsuit. “The represented discounts are advertised on placards placed at, on, or above the particular Outlet Merchandise being discounted.”

Relying on the information presented at the outlet store, Dahlin believed she was getting a great deal with those “sale prices,” according to the Under Armour class action lawsuit. She purchased a mesh tank top and a pair of crossfit pants for a total of $36.82.

“Retailers, including Defendant, understand that consumers are susceptible to a good bargain, and therefore, Defendant has a substantial financial interest in making the consumer believe they are receiving a good bargain, even if they are not,” the Under Armour class action lawsuit states. “A product’s reference price matters to consumers because it serves as a baseline upon which consumers perceive a product’s value.”

An investigation by her legal team discovered other factors that would certainly have affected Dahlin’s purchasing decision, according to the filing.

For one thing, “these products were never offered for sale at the listed reference price on the price tag,” which constitutes violations of both federal and state law, according to the Under Armour class action lawsuit.

California’s Unfair Competition Law states: “No price shall be advertised as a former price of any advertised thing, unless the alleged former price was the prevailing market price as above defined within three months next immediately preceding the publication of the advertisement or unless the date when the alleged former price did prevail is clearly, exactly and conspicuously stated in the advertisement.”

The Under Armour class action lawsuit also cites the Federal Trade Commission Act, which states that if the original price is “not bona fide but fictitious – for example, where an artificial, inflated price was established for the purpose of enabling the subsequent offer of a large reduction – the ‘bargain’ being advertised is a false one.”

In addition, the Under Armour class action lawsuit claims that many of the items for sale at the company’s outlet stores had never actually been offered at other stores, at any price.

The lawsuit states that “many products sold in the Citadel Outlet were manufactured for sale — specifically and exclusively — at Outlets, and that the products are never sold anywhere else. Neither Plaintiff’s receipt, in-store signage, nor information listed on the price tags suggested that the products were exclusive to the Outlet.”

Plaintiffs are demanding a jury trial, seeking restitution and court costs. In addition, they are asking the court to order Under Armour to stop those practices and “engage in a corrective advertising campaign.”

The plaintiff also seeks actual, punitive and statutory damages if the company fails to respond to a letter demanding that “it rectify the problems associated with the actions detailed above and give notice to all affected consumers of Defendant’s intent to act,” according to the Under Armour class action lawsuit.

Similar claims against other retailers have been filed in the past few years. Gap, Guess and The Children’s Place have all faced fake sale class action lawsuits.

“Through its false and misleading marketing, advertising, and pricing scheme alleged herein, Under Armour violated, and continues to violate, California and federal law which prohibits the advertisement of goods for sale as discounted from former prices that are false and which prohibits the dissemination of misleading statements about the existence and amount of price reductions,” the Under Armour class action lawsuit reads.

Dahlin is represented by Todd D. Carpenter and Scott F. Braden of Carlson Lynch LLP.

The Under Armour Fake Sale Class Action Lawsuit is Matilda Dahlin v. Under Armour Inc., et al., Case No. 2:20-cv-03706, in the U.S. District Court for the Central District of California.

Read More Lawsuit & Settlement News:

Nordstrom Class Action Alleges ‘Fake Sale’ Pricing Scheme

Why Was Zantac Recalled?

Old Navy Class Action Alleges Ongoing Fake Sales

Seattle Woman Files Uber Sexual Assault Lawsuit