J C Penney Company Inc (JCP) has settled a lawsuit over false advertising in California.
J.C. Penney has agreed to pay $50 million to settle the lawsuit. The company was sued after customers in California claimed that it had been falsely offering deep discounts on items that were actually being sold for their normal prices. The false discounts were on items only carried by the retailer, reports The New York Times.
J.C. Penney denies that it did anything wrong, but said that it was willing to settle the lawsuit to stop further troubles. However, it did agree to better its advertising and discounting policies. Each claim in the lawsuit will be paid from the $50 million settlement based on how much the person spent at the stores, NYT
notes.
Depsite the lawsuit against it, J.C. Penney has reported that same-store sales in the third quarter were up more than 6%. It will report earnings for Q3 2015 on Friday and the legal fees from the settlement will affect this quarter, reports Financial Times.
JCP shares were down 1% as of Noon Wednesday.
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