99 Cents Only Accused|of Extorting Shoplifters

     LOS ANGELES (CN) – A class action accuses 99 Cents Only Stores of “extorting” up to $500 apiece from thousands of people it accuses of shoplifting, whether they are guilty or not.
     Dennis J. Stankie sued the chain store on Friday in state court, alleging unlawful, unfair and fraudulent trade practices and privacy invasion.
     Stankie claims that the pursuit of “civil shoplifting damages” has become so lucrative that 99 Cents Stores and other retailers are “staging the detention of customers, obtaining their personal information and extorting hundreds of dollars in alleged statutory damages – even when the merchandise at issue is worth less than $20 and/or there is little or no evidence of any attempt to shoplift.”
     Retailers use law firms as “demand letter mills” to seek damages from customers, though the firms do not investigate the validity of the underlying cases or have any intention of suing, the complaint states.
     Stankie’s attorney Darrell Padgette said it does not matter if a person is shoplifting; customers can be “accosted” by 99 Cents personnel and have their personal information taken from them.
     “Once the collection machine starts, these letters are generated,” Padgette said in an interview.
     If a person decides not pay, the threat of legal action lingers, even if the retailer never sues.
     “In Mr. Stankie’s case, he had been receiving collection calls all the way through May 2015. Which, by the way, is notably after the statute of limitations to collect on it,” Padgette said.
     According to the lawsuit: “The demand letters are crafted to frighten consumers into believing that failure to pay the amount demanded may result in criminal prosecution, subject them to a civil suit, and put them at risk of liability for significant additional damages that the merchant has no legal right to recover.”
     The 99 Cents Only Stores use Florida-based Palmer, Reifler & Associates, which sends thousands of demand letters each year, according to the complaint.
     Stankie was detained by 99 Cents personnel at a Los Angeles County store in early 2014 and accused of shoplifting a bottle of Tylenol. He says they demanded that he pay a $300 penalty and made a citizen’s arrest after a police officer responding to a 911 call from Stankie’s phone refused to detain him.
     Stankie says he was taken to a police department and released. No criminal charges were filed.
     Stankie had asked the cashier to ring up the Tylenol but she neglected to do so, Padgette said.
     Stankie received two demand letters from the law firm, the first one for $250, the next for $525, according to the lawsuit.
     99 Cents Only threatens to call the police on shoplifting suspects if they do not give up personal information and allow “intrusive searches,” the complaint states. Then the company sends form letters demanding a pre-set amount of money and threatening legal action – including legal costs – for failure to pay.
     “Defendants have no intention of bringing suit against those consumers. The threat to file civil action is made idly and falsely without any intent to follow through with such an action,” the complaint states.
     The practice generates millions of dollars for firms and retailers, according to the lawsuit.
     Padgette is with KP Law. Co-counsel on the complaint is Michael Chen with Chen & Tran of Santa Ana.
     Padgette said many retailers seek civil shoplifting damages using the same demand letter mills.
     99 Cents Only Stores did not immediately respond to a request for comment.

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