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Class Action FDUTPA Lawsuit Filed Against Costco—Florida Man Argues Battery Advertisement Was Deceptive

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According to a report from Law360, the retail giant Costco is facing a lawsuit under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). A Florida man alleges that Costco’s guarantee of a “free” battery replacement under warranty for the Interstate automobile batteries it sells improperly misleads consumers. In this blog post, our West Palm Beach deceptive & unfair trade practices lawyers discuss the allegations raised in the civil lawsuit against Costco.

Allegations: Deceptive Marketing By Costco 

The class action lawsuit in this case was filed in the United States District Court for the Southern District of Florida on May 7th, 2021. In the lawsuit, the plaintiff, a Florida man named John Skrandel, alleges that Costo promises its customers a 36 or 42 month warranty on the interstate car batteries that it sells. The warranty in question allegedly promises consumers a “free” replacement if their battery is defective.

However, Mr. Skrandel contends that the battery replacement actually includes an additional cost that is not disclosed to consumers. He states that Costco requires consumers to purchase specific batteries when going in for the warranty-covered replacement. They are charged the difference between the value of their original battery and the cost of the replacement battery. Mr. Skrandel argues that Costco’s policy violates the FDUTPA, a state statute that prohibits deceptive and unfair commercial practices, including false advertising. 

A Federal Court Must Determine If Costco’s Advertising Deceives Reasonable Consumers 

As this is pending litigation, it is unclear how the case will turn out. That being said, it is worth emphasizing that Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA) was drafted with an eye towards federal law, including the regulations issued by the Federal Trade Commission (FTC).

In recent years, the FTC has raised concerns about how liberally businesses are using the term “free” in their marketing and advertising. As explained by the FTC in its Guide Concerning Use of the Word “Free” and Similar Representations, companies have an affirmative obligation to ensure that there is “no reasonable probability that the terms of the offer might be misunderstood.

As a significant portion of our commercial law practice is devoted to business & consumer fraud claims and FDUTPA litigation, our Florida attorneys will keep a close eye on this case to see how the federal court interprets the advertising practices used by Costco. It could provide an illustrative example for what is and is not permitted under Florida law.

Schedule a Confidential Consultation With a Florida FDUTPA Claims Attorney

At Pike & Lustig, LLP, our Florida business fraud lawyers have deep expertise in FDUPTA claims. We are driven to protect our clients through every step of the legal process. If you have questions about what constitutes a deceptive or otherwise unfair trade practice under Florida law, we can get you answers. Contact us today for a confidential appointment with an attorney. Our firm handles all sides of FDUTPA litigation from our offices in West Palm Beach and Miami.

Resources:

ftc.gov/es/enforcement/rules/rulemaking-regulatory-reform-proceedings/guide-concerning-use-word-free-similar

law360.com/articles/1382699/class-action-calls-costco-car-battery-warranty-deceptive

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