FTC and 20 states sue Dollar General over alleged register overcharges

FTC cites tens of thousands of consumer pricing complaints nationwide

The Federal Trade Commission and 20 states sued Dollar General on Monday, Oct. 26, in a case filed in the U.S. District Court in Nashville. The lawsuit alleges that the company charged customers more for some items at the register than the prices displayed on shelves, price tags and advertisements.

The FTC describes the allegations as a pattern of deceptive pricing. In its complaint, the agency says the practices are “costing consumers millions of dollars.”

The states joining the complaint are Alabama, Arizona, Arkansas, California, Connecticut, Florida, Illinois, Iowa, Kansas, Louisiana, Michigan, Mississippi, Nebraska, New Jersey, North Carolina, Ohio, Oklahoma, Tennessee, Utah and Wisconsin.

The FTC alleges that Dollar General extracted millions of dollars in unlawful overcharges from vulnerable shoppers without sufficient safeguards to prevent the conduct.

The suit also cites tens of thousands of complaints from consumers across the country who say Dollar General did not honor the advertised price.

According to the FTC, the Goodlettsville, Tennessee-based chain markets itself as a low-priced alternative to large discount and big-box retailers. The agency said Dollar General serves a low- and fixed-income customer segment that relies on the accuracy of its pricing.

In a release, FTC Bureau of Consumer Protection Director Christopher Mufarrige said, “Dollar General has betrayed the trust of millions of American consumers and imposed significant financial harm on communities and consumers who are already struggling to make their paychecks last.”

Mufarrige also said, “The FTC’s action underscores the agency’s commitment to lowering costs for consumers by stopping deceptive pricing practices that harm Americans.”

The FTC further alleges that Dollar General knew its practices harmed consumers and had been warned against them. According to the complaint, the company failed to implement policies and practices to adequately address the problem.

Dollar General operates more than 21,000 stores nationwide. The company did not immediately respond to requests for comment issued by CNBC and CBS News.