NEW YORK (TheStreet) -- Shares of J.C. Penney (JCP) are down by 0.29% to $8.52 in late afternoon trading on Tuesday, after yesterday's decision by a federal judge in Los Angeles, who certified a class action lawsuit against the company. The suit accuses the retailer of hiking up prices on apparel and accessories in order to fool consumers into believing they were getting good deals when the items went on sale, Reuters reports.
The complaint against the retail giant says that the company has been operating a "massive, years-long pervasive campaign" designed to device its shoppers regarding the pricing of private and outside label brands.
The lawsuit's lead plaintiff said she realized what J.C. Penney was up to after buying three shirts for $17.99 each, a 40% discount from the items' "original" $30 price, she would later learn that the price of the clothes was never above $17.99 in the prior three months, Reuters added.
Retailers are supposed to sell items at original prices for a "reasonable" period of time before placing them on sale, Reuters reports the FTC as saying.
By allowing shoppers to sue as a group they could receive great compensation at lower cost to the company.
Separately, TheStreet Ratings team rates PENNEY (J C) CO as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation: