RugsUSA Hit with Class Action Over Alleged Use of False Reference Prices Online

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A proposed class action lawsuit claims RugsUSA, LLC has misled consumers by listing products on its online store with false “original” prices and corresponding fake discounts, giving the impression of a bargain.

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The 25-page lawsuit alleges that the company uses artificially inflated reference prices to deceive consumers into thinking they are getting a discount on a product with a higher market value than it really has. In fact, these representations intentionally mislead shoppers, as the company’s products are perpetually on sale and never sold at the purported original price, the suit contends.

According to the case, RugsUSA advertises products on its website with false original prices crossed out—implying that the items were previously sold at these “strikethrough” prices—with the corresponding discount price or percentage listed adjacent.

“In reality, the strikethrough prices and ‘% discount’ listed by [the defendant] are entirely fabricated to give off the appearance of a bargain,” the complaint argues. “[RugsUSA] intentionally misled [the plaintiff], as well as other consumers, into believing that its products are worth and ordinarily offered at a higher price.”

Per the filing, state law prohibits companies like RugsUSA from using phrases that advertise a discount percentage and terms such as “sale,” “originally” or “clearance” when the listed reference price is not, in truth, the retailer’s former price for a product.

The plaintiff, an Oregon resident, bought a rug from the defendant’s online store in September 2022, the lawsuit says. At the time of purchase, the rug was listed at a strikethrough price of $309.40 and a “sale” price of $123.70, the suit explains. However, almost a year after the man’s purchase, the rug is apparently still advertised on RugsUSA’s website at the same sale price, the case stresses.

The plaintiff claims he would not have paid as much for the rug, or bought it at all, had he known that the company misrepresented its value and quality.

The lawsuit looks to represent anyone in the United States who purchased any RugsUSA products available on its website during the applicable statute of limitations period.

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