Hardware Chain, Accused of Overcharging Customers, Pays $2 Million

Home Depot landed in some hot water after it was accused of false advertising and unfair competition over allegedly overcharging customers in a California civil complaint. As a result, the home improvement retail chain, which has admitted to no wrongdoing, has been ordered to pay more than $2 million to settle the claim.

The complaint, which was filed by the Los Angeles County District Attorney's Office, alleged that Home Depot had been charging customers prices higher than the lowest price it advertised or posted. In what is commonly known as a "scanner violation," the practice occurs when the shelf tag of an item does not match the price when the UPC code is scanned at the point-of-sale device or register.

Los Angeles County District Attorney George Gascón said in a statement that "false advertising and unfair competition are serious offenses that undermine consumer trust and distort the marketplace."

"When companies engage in deceptive practices, they not only cheat consumers but also gain an unjust advantage over businesses that operate ethically and transparently," Gascón continued. "This settlement is a clear message that such behavior will not be tolerated and underscores our commitment to safeguarding the rights of consumers in our community."

As part of the Aug. 26 judgment, Home Depot is prohibited from "engaging in false or misleading advertising and charging an amount greater than the lowest price posted for an item." The chain is also being required to implement a price accuracy program, which will involve more audits and training, as well as eliminating price increases on weekend days. The company also also being ordered to pay $1.7 million in civil penalties and $277,251 in costs and restitution.

In a statement to Fox Business, Home Depot noted that it has updated the timing of its price changes to "ensure consistency" for customers.