Amazon accused of misleading consumers with deceptive discounts

OAKLAND, Calif. (KTVU) - (KTVU)  The California-based Consumer Watchdog Group is accusing Amazon of misleading consumers and violating the law by publishing deceptive pricing. The group filed petitions with the California Attorney General and the Federal Trade Commission Monday.

The Consumer Watchdog Group says it conducted a study between February 3-6, 2017 and checked more than 4,000 products on Amazon's website. The group says their study found more than 25% of the items had a list price crossed out with a line that purported to show how much the consumer would save. A Consumer Watchdog spokesman John Simpson said the study found no basis, however, for the list price when compared with other market prices.

"The list price really is a notional bogus price that doesn't seem to have any real relationship to anything," Simpson said, "And so they're creating the impression of a discount, luring consumers in to buy if you will, when there really isn't such discount at all."

Amazon has become one of the world's biggest retailers by catering to online window shoppers, looking for an expansive range of products.

Sam Lord of San Francisco says he often buys items on Amazon for his young children.

"Diapers, kids stuff, toilet paper," said Lord, "I just bought some sunscreen today. Just everything."

"There's times when I get on Amazon and I feel like I'm getting a deal," said another Amazon shopper, Mekayah Logan of San Francisco.

Amazon was recently fined $1 million dollars in Canada for failing to prove the accuracy of its list prices.

The petition states that another online company Overstock.Com was fined $6.8 million, after a California Superior Court ruled in 2014 that Overstock.com's use of "list prices" was misleading to customers.

"Amazon may offer great service, convenience, that sort of thing, but if you're getting there thinking it is a deal, that isn't so," Simpson said.

Some consumers, though, say they don't necessarily look at the savings posted on Amazon, but instead compare prices to local stores, other Amazon products, or decide based on the final price.

"I understand the complaint, but I guess I don't even look at the list price," said Sam Lord, "I just think about is the price matching what I'm willing to pay."

Amazon responded in a statement to the L.A. Times which stated, "Manufacturers, vendors and sellers provide list prices...We validate list prices against actual prices recently found across Amazon and other retailers, and we eliminate List Price when we believe it isn't relevant to our customers."

The company called the Consumer Watchdog Group accusations misleading and stated that the company has introduced other pricing comparisons based on the Amazon price history of various products.

The Consumer Watchdog Group says Amazon should face fines and be forced to make its list pricing more transparent.