December 15, 2010, 2:49 PM

Best Buy and Connecticut’s AG settle over alleged ‘Internet bait-and-switch’

Under the settlement, Best Buy will pay $399,000 and post store notices.

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After more than two years of litigation, Best Buy Co. Inc. and the Connecticut attorney general have settled a lawsuit in which Connecticut alleged that Best Buy used its web site and in-store computer kiosks to deceive consumers about product prices and overcharge them.

In May 2007, Connecticut Attorney General Richard Blumenthal brought a lawsuit against Best Buy, No. 10 in the Internet Retailer Top 500 Guide, that charged Best Buy with “Internet bait-and-switch.” At the time Blumenthal’s office alleged that prices that were listed on kiosks in Best Buy stores in Connecticut were higher than those posted on BestBuy.com. The lawsuit also claimed that Best Buy’s kiosks in its Connecticut locations were “virtually identical” to its e-commerce site, apart from the pricing, and that store customers accessed information by clicking a tab labeled BestBuy.com even though they weren’t connected to the web site.

In the settlement announced yesterday, Best Buy, which in 2007 attributed the incident to a “small percentage” of store salespeople misunderstanding the difference between in-store kiosk prices and online pricing, will pay Connecticut $399,000 and reimburse any affected Connecticut customers with documentation of the difference between the online prices and the higher in-store kiosk prices they were originally charged. In its Connecticut locations, Best Buy also will post the settlement notice near the front of the store and keep a copy of the settlement along with a claim form consumers can use to seek restitution.

“To the extent that the kiosk displays a price that could differ from BestBuy.com, the defendant shall clearly and conspicuously disclose to consumers that prices displayed on the kiosk may differ from BestBuy.com prices,” the Connecticut Attorney General says.

Best Buy says about 16 customers over time in Connecticut raised an issue between in-store kiosk and BestBuy.com price differences. Best Buy says it has resolved all disputes.

“Consumers were identified over the past seven years who raised an issue with Best Buy's kiosks showing in-store, not online prices and Best Buy took action in 2007 to ensure those affected claims were resolved,” Best Buy said in a statement. “Since then, Best Buy is not aware of any other Connecticut consumers affected by this issue. These allegations identified at most a situation in which Best Buy's efforts to ensure that customers receive the best product information, selection and price had, on unfortunate occasion, not met those customers’ expectations.”

Best Buy also agreed to a settlement that resolved the lawsuit without a fine or civil penalty, the retailer says. The $399,000 Best Buy will pay to Connecticut’s general fund was the monetary amount agreed upon to settle the case, says the Connecticut attorney general. Best Buy has about 45 days to place the signage and claim forms in its Connecticut stores, the settlement says.

Best Buy says the notice in its Connecticut stores will be posted beginning next month. “Our stores in Connecticut will post a notice, calling on any Connecticut customers who believe they were affected by what appeared on Best Buy’s kiosks before March 2007 to ask the store for a claim form,” the company says.

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