(BRAIN) — Specialized Bicycle has reached a confidential settlement in a case filed in California over so-called "junk fees" charged to online customers. Giant Bicycle, which is being sued on a similar claims by the same attorney who filed the Specialized case, has not reached an agreement.
Both suits pointed to a California law banning "junk fees" or "drip fees" that took effect in July, 2024. According to a FAQ published by the state’s attorney general, businesses must include any fees in their advertised prices, although taxes and shipping charges can be added in the shopping cart. Restaurants are exempt.
In the Specialized case, plaintiff Christopher Rossow, a Virginia man, said the Specialized e-commerce website did not show him all the fees he would be charged until after he submitted his credit card and shipping information.
"Whenever a consumer visits www.specialized.com (the “Website”) and selects an item for purchase, they are not shown the total cost upfront. Instead, consumers are quoted an artificially low price, only for Defendant to sneak in a mandatory “Shipping & Handling” fee (the “Fee”) regardless of whether the consumer selects the “Ship to Home” or “Pickup from Store” option. For e-bike purchases, Defendant additionally charges a $15.00 “Environmental Recycling Fee” (the “Recycling Fee”) after consumers input all their shipping and credit card information. This cheap trick has enabled Defendant to swindle substantial sums of money from its customers," Rossow's complaint reads in part.
The complaint in the U.S. District Court for Northern California said Specialized's practices violated several California laws and one Virginia law. Terms of the settlement were not disclosed except that each side is paying its own legal costs.
Walnut Creek attorney Stefan Bogdanovich also filed a suit against Giant Bicycle in February with Bronson Thomas, a California man, as plaintiff. Thomas said he bought a Giant bike and some other products from the Giant website and Giant "subtly added a 'Destination fee' of $75.00 to the checkout screen. The fee was mandatory because Plaintiff could not purchase the products from Defendant’s Website without paying the fee. Plaintiff was charged this fee even though he selected to pick up his items from the store," Thomas' complaint reads.
The Giant case, filed in the U.S. District Court for the Central District of California, Western Division, is proceeding, with the court on May 19 issuing an order extending Giant's window to respond to Thomas' complaint to June 17.
Both cases were filed as putative class-action suits but the Specialized case was never certified as a class action, and the Giant case has not been certified so far. Both bike companies have declined to comment on the cases.
