District
Attorney Nola Tedesco Foulston announces today that her office has
concluded an ongoing consumer investigation of the Kohl’s Department Stores,
Inc. (Kohl’s) and that as a result of the District Attorney’s findings; a
second consent judgment has been entered in the District Court for Sedgwick
County. The Journal Entry of Consent Judgment, approved by Judge Richard
Ballinger, was filed on July 18th, 2002 with the Clerk of the
District Court in Wichita.
For
the second time in just over a year, the District Attorney’s Office
commenced investigative review of consumer practices of Kohl’s that has now
resulted in a second consent judgment under the
Kansas
Consumer Protection Act. In December of 2000, the District Attorney and
the Kansas Attorney General had alleged breach of consumer laws in the sales
practices of Kohl’s. At that time, Kohl’s agreed to a consent judgment
including civil penalties, fees and costs. As is the policy of District
Attorney Nola Tedesco Foulston to assure full compliance with Kansas Consumer
Law, continuing review of the sales practices of Kohl’s was undertaken after
the first consent judgment.
As
an important function of its office, the District Attorney regularly reviews
and critically analyzes the sales practices of merchants within this
jurisdiction who are providing goods to the consumers of this community.
In applying the proscribed laws as set forth in the
Kansas
Consumer Protection Act, the District Attorney is charged with special
responsibilities to assure that companies comply with fair business practices
as set forth in Kansas law. One
of the areas of particular concern is the advertisement of goods as
“REDUCED” or “SALES" prices that have the effect of inducing
consumers to buy goods because they believe they are getting a better price
than that which the products may be regularly offered in stores on a
consistent basis.
The
Kansas Consumer Protection Act
provides specifically in Kansas Statutes
Annotated 50-626(a) and (b)(7) that merchants shall not make misleading
representations when making price comparison to the merchant's own price or a
competitor’s price. This law,
as interpreted by the District Attorney, requires that in order for a business
to advertise certain products to the consuming public as “SALE” items,
those items must have been maintained in
the inventory of the merchant at the regular price for a sufficient
period of time to be in compliance with the law.
A
regular review of Kohl’s print advertisements was conducted and site visits
to the two (2) Kohl’s retail stores located in Wichita were undertaken for
the purpose of investigating, inspecting and reviewing whether Kohl’s
maintained compliance with the Kansas
Consumer Protection Act in their advertising, pricing and signage at the
stores including the labeling of store products at “SALE” prices.
The District Attorney’s investigators found that many items
designated by brightly colored signs as being on periodic “SALE” were in
fact labeled as such for a for a majority of the time.
In
accord with the District Attorney’s ongoing investigation, Kohl's was
required to provide specific pricing information on certain items that were
offered to the public for the period of February 15, 2001 through and
including June 15, 2001. The District Attorney’s review of the investigative
information included displayed regular price, the displayed sale
price (if any), the actual point-of-sale price and number of
units sold at these prices for each day during the relevant period.
Upon
review of all the information concerning pricing and sales practices obtained
from Kohl’s during the investigation, the District Attorney found that some
of the sixty seven (67) items from their store that were reviewed were offered
on "SALE" in comparison to a reference price, when in fact, such
items were not being sold and/or offered for sale at the stated reference
price for a sufficient period of time between February 15, 2001 and June 15,
2001 in violation of K.S.A. 50-626(a)
and (b)(7) of the Kansas Consumer Protection Act.
A
consent judgment of the type entered with Kohl’s is a legal mechanism where
a party agrees not to dispute the claims made by the District Attorney in her
pleadings filed with the court and without admitting to these allegations, the
matter is resolved in many instances to avoid the costs and uncertainties of
litigation.
The
District Attorney acknowledged and the Judgment notes that Kohl’s, its
employees and representatives, fully cooperated with the investigation and in
the resolution of this case.
Kohl’s
has agreed to pay civil penalties, fees and costs in settlement of this matter.
Kohl's has agreed to take all steps necessary to comply with the pricing
provisions of the Kansas Consumer Protection Act.
