Michigan Attorney General Mike Cox Announces Legal Action Against Wal-Mart

9 March 2006

Attorney General Mike Cox announced today that he is taking legal action against retailing giant Wal- Mart for its failure to individually price items as required by Michigan law. The action swiftly follows an extensive investigation of numerous Wal-Mart stores statewide in Michigan by investigators from the Attorney General's office, beginning in December of 2005.

According to Attorney General Mike Cox, "Consumers in Michigan have a right to know the cost of an item when they go shopping. 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 was led by staff from the Attorney General's Consumer Protection Division, joined by investigators pulled from the Criminal Division. Additional Consumer Protection staff was trained to participate in the investigation. Investigators looked at thousands of items in each store surveyed. In addition, at least two investigators visited each store.

The investigation is estimated to have cost at least $30,000.

Five Wal-Mart stores were audited: Okemos, Howell, Roseville, Saginaw and Coldwater. The highest estimated compliance was found at the Okemos store (75%). The Saginaw store had an estimated compliance rate of 25%. The Roseville, Coldwater and Howell stores all had estimated compliance rates of 20%.

According to Cox, "Marking prices on only 20 percent of items is shocking and inexcusable. And when multiple stores fail to comply with Michigan's item pricing law, it becomes more than just a store manager problem. It is a Wal- Mart problem."

"Michigan's law is clear: price items individually, so consumers can shop and compare. This legal action against Wal-Mart will improve their item pricing and cause other retailers to do the same," Cox added.

The legal action is in the form of a Notice of Intended Action (NIA), a generally necessary step before a company can be sued by the Attorney General 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 ten days to take substantial compliance efforts, or be sued. Any voluntary resolution will require the payment of a substantial civil penalty and reimbursement to the State for the cost of the investigation.

Today's announcement against giant retailer Wal-Mart comes on the heels of a two-year long effort by the Attorney General's Consumer Protection Division to work with the Michigan Department of Agriculture in selecting a target.

"The attorneys in my Consumer Protection Division have a long history of pursuing item pricing investigations, and of cooperating with the Department of Agriculture. That cooperation broke down over the last 24 months. That is why I personally directed my staff to undertake and complete this investigation on their own. I am proud of the thorough and painstaking job that they completed.

"However, the Attorney General's Office is too small to handle such costly investigations without the traditional cooperation of the Department of Agriculture. I hope that, in the future, our Consumer Protection attorneys and staff will again receive cooperation from the Department of Agriculture in selecting a target and pursuing a joint investigation," Cox noted.

The Attorney General has a Consumer Alert addressing frequently asked item pricing questions by consumers and a wallet-sized item pricing bill-of-rights card, both available by calling the Consumer Protection Division, 1-877-SOLVE-88 (1-877-765-8388), or accessing the Attorney General's Web site http://www.michigan.gov/ag .

Consumers with complaints about a store's failure to item price should continue to direct information to the Department of Agriculture, Weights & Measures Section in the E.C. Heffron Laboratory, by calling (517) 322-1370 or in writing addressed to 940 Venture Lane, Williamston, MI 48895.

Source: prnewswire

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