Michigan Attorney General Accuses Wal-Mart of Price Law Violations
LANSING, Mich. -- Michigan's attorney general Mike Cox said yesterday he is taking legal action against Wal-Mart Stores, Inc. for "its failure to individually price items as required by Michigan law."
The action follows an investigation of numerous Wal-Mart stores statewide in Michigan by investigators from the attorney general's office, beginning in December of 2005.
The legal action is in the form of a Notice of Intended Action (NIA), which Cox said is a generally necessary step before a company can be sued under the Consumer Protection Act. The NIA alleges violations of Michigan's Pricing and Advertising of Consumer Items Act, frequently referred to as the "Item Pricing Act," and Michigan's Consumer Protection Act.
Wal-Mart has 10 days to take substantial compliance efforts, or be sued, said Cox.
"Consumers in Michigan have a right to know the cost of an item when they go shopping," said Cox in a statement. "That means stores have a duty to follow the law and label prices on individual items. The results of my office's investigation are clear: Wal-Mart has failed to comply with Michigan's item pricing law on a massive scale."
The investigation, which is estimated to have cost at least $30,000, was led by staff from the attorney general's Consumer Protection Division, joined by investigators pulled from the Criminal Division. Investigators looked at thousands of items in each store surveyed. In addition, at least two investigators visited each store.
Investigators audited five Wal-Marts in Okemos, Howell, Roseville, Saginaw, and Coldwater. They found the highest estimated compliance (75 percent) at the Okemos store. The Saginaw store had an estimated compliance rate of 25 percent, while the Roseville, Coldwater, and Howell stores all had estimated compliance rates of 20 percent.
"This legal action against Wal-Mart will improve their item pricing and cause other retailers to do the same," said Cox.
According to an Associated Press report, Michigan is the only state in the nation that requires price tags on almost every item in stores. If consumers are charged more than the price marked, they can demand the difference plus 10 times the amount of the difference, up to $5.
However, Wal-Mart has been investigated by other states for its pricing practices. In January, the retailer agreed to pay $25,000 to settle allegations it overcharged customers at some Wisconsin stores by using scales that didn't automatically subtract the weight of the bags used to buy bulk items such as grapes and grind-it-yourself coffee.
The action follows an investigation of numerous Wal-Mart stores statewide in Michigan by investigators from the attorney general's office, beginning in December of 2005.
The legal action is in the form of a Notice of Intended Action (NIA), which Cox said is a generally necessary step before a company can be sued under the Consumer Protection Act. The NIA alleges violations of Michigan's Pricing and Advertising of Consumer Items Act, frequently referred to as the "Item Pricing Act," and Michigan's Consumer Protection Act.
Wal-Mart has 10 days to take substantial compliance efforts, or be sued, said Cox.
"Consumers in Michigan have a right to know the cost of an item when they go shopping," said Cox in a statement. "That means stores have a duty to follow the law and label prices on individual items. The results of my office's investigation are clear: Wal-Mart has failed to comply with Michigan's item pricing law on a massive scale."
The investigation, which is estimated to have cost at least $30,000, was led by staff from the attorney general's Consumer Protection Division, joined by investigators pulled from the Criminal Division. Investigators looked at thousands of items in each store surveyed. In addition, at least two investigators visited each store.
Investigators audited five Wal-Marts in Okemos, Howell, Roseville, Saginaw, and Coldwater. They found the highest estimated compliance (75 percent) at the Okemos store. The Saginaw store had an estimated compliance rate of 25 percent, while the Roseville, Coldwater, and Howell stores all had estimated compliance rates of 20 percent.
"This legal action against Wal-Mart will improve their item pricing and cause other retailers to do the same," said Cox.
According to an Associated Press report, Michigan is the only state in the nation that requires price tags on almost every item in stores. If consumers are charged more than the price marked, they can demand the difference plus 10 times the amount of the difference, up to $5.
However, Wal-Mart has been investigated by other states for its pricing practices. In January, the retailer agreed to pay $25,000 to settle allegations it overcharged customers at some Wisconsin stores by using scales that didn't automatically subtract the weight of the bags used to buy bulk items such as grapes and grind-it-yourself coffee.