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Thread: Class action lawsuit against Apple seeks to punish them for misleading sales tax

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    Owner Dan Druff's Avatar
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    Class action lawsuit against Apple seeks to punish them for misleading sales tax

    I remember the first time I bought a highly discounted cell phone. It was $99 with a 2-year wireless agreement, but I was shocked when I was also charged over $30 in sales tax.

    "I believe you've made a mistake on the tax," I told the sales rep.

    "No, we tax the phone at its standard price of $399," I was told in response.

    Believing this to be illegal, I told them that they couldn't do this. The rep then explained, "I can understand why it looks weird to you, but what's really happening is you're paying full price on the phone, but getting a $300 discount on your cell service. But to make it easier and more instant, we just give you the discount on the phone. However, a full $399 sale of the phone is really taking place, and the state of California requires that sales tax on that amount is paid."

    I was annoyed, but I believed the explanation.

    Indeed, the sales rep was correct. California does require sales tax to be paid on the retail value of the item, in such a transaction, if it is "bundled" with a service contract. This prevents wireless providers from dodging sales tax by folding the cost of the device into the monthly service charge, the latter of which is NOT subject to sales tax.

    Anyway, in order to prevent customers from getting angry about this weird and shady-looking tax structure, some retailers choose to simply eat the tax difference and pay the state back on their own. Walmart is/was one of those retailers. Apple, however, would always charge in tax exactly what the state collected from them.

    A lawsuit was filed this year against Apple for deceptive advertising. Basically, the lawsuit contends that Apple was the ONLY retailer not disclosing up front that consumers would need to pay the retail-value of sales tax on discounted "bundled with service" iPhones, while all other retailers either disclosed it clearly or didn't pass the higher tax onto customers.

    Here is the suit: https://eclaim.kccllc.net/caclaimfor...0Complaint.pdf

    It's of the class action variety. You do not need to opt-in. If you bought an iPhone bundled with service directly from Apple (such as at the Apple store), you are part of the class, provided the purchase was between 2009 and 2014.

    Of course, since this is a class action suit, I imagine that if I do get anything, it will be sometime around 2019, and it will likely be something like a $5 gift certificate to the App Store.

    Here's the website about the suit: https://eclaim.kccllc.net/caclaimforms/aza/home.aspx

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    Diamond PLOL's Avatar
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    This is just a California thing. And it looks like it's still being litigated. From what I understand it doesn't really look like Apple did anything wrong.

    I do get about ~$200/yr from class action settlements. It helps if you're willing to commit perjury for very little payoff.
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    Owner Dan Druff's Avatar
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    Quote Originally Posted by PLOL View Post
    This is just a California thing. And it looks like it's still being litigated. From what I understand it doesn't really look like Apple did anything wrong.

    I do get about ~$200/yr from class action settlements. It helps if you're willing to commit perjury for very little payoff.
    Yes, it's just a CA thing.

    Apple didn't do anything wrong by collecting the tax. However, it is somewhat questionable that they did not disclose the unusually high sales tax in their promotional material, whereas (apparently) all other retailers did.

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    Someone help me to understand what attracts people to want to live in Cali these days?

    Seriously, im genuinely interested to know!

    Everything ive seen and read says "get the fuck out of Cali"

    Does anyone here think the opposite?

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    Quote Originally Posted by Gordman View Post
    Someone help me to understand what attracts people to want to live in Cali these days?

    Seriously, im genuinely interested to know!

    Everything ive seen and read says "get the fuck out of Cali"

    Does anyone here think the opposite?
    It's only the world's 6th largest economy all by itself, one of the world's leading cradles of technological innovation, one of the most important media capitals of the world, producer of a huge chunk of the nation's produce, consistently ahead of the curve on policy matters, home to many important strategic industries, universities and military installations, filled with natural beauty and economic opportunity. Other than that there's not much going for it.

     
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    Class actions are a huge racket to enrich attorneys. I have some personal knowledge about this, and this case involving the allegation that Subway's footlongs were not a foot long.

    Thankfully the appeals court nixed this settlement which had NO consumer benefit.

    http://www.abajournal.com/news/artic...aign=most_read

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    Diamond PLOL's Avatar
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    Quote Originally Posted by hongkonger View Post
    Quote Originally Posted by Gordman View Post
    Someone help me to understand what attracts people to want to live in Cali these days?

    Seriously, im genuinely interested to know!

    Everything ive seen and read says "get the fuck out of Cali"

    Does anyone here think the opposite?
    It's only the world's 6th largest economy all by itself, one of the world's leading cradles of technological innovation, one of the most important media capitals of the world, producer of a huge chunk of the nation's produce, consistently ahead of the curve on policy matters, home to many important strategic industries, universities and military installations, filled with natural beauty and economic opportunity. Other than that there's not much going for it.
    Lol, THIS. Seriously, what a dumb statement. "Everything you read"? What's that? Fox News? Compare taxes in Florida compared to California. Then compare incomes. You're way better off in California, unless you're retired
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    Quote Originally Posted by PLOL View Post
    Quote Originally Posted by hongkonger View Post

    It's only the world's 6th largest economy all by itself, one of the world's leading cradles of technological innovation, one of the most important media capitals of the world, producer of a huge chunk of the nation's produce, consistently ahead of the curve on policy matters, home to many important strategic industries, universities and military installations, filled with natural beauty and economic opportunity. Other than that there's not much going for it.
    Lol, THIS. Seriously, what a dumb statement. "Everything you read"? What's that? Fox News? Compare taxes in Florida compared to California. Then compare incomes. You're way better off in California, unless you're retired
    Until the big one hits and drops the entire coastal region from LA to SF into the Pacific. 

    Although I'd say Florida not having a state income tax vs California's top rate of over 10% and CA base sales tax is 7% plus whatever local jurisdictions tack on while Floridas is 6% lower. There are admittedly a lot of shitty Jerry Springer types in Florida but it also produces a fair amount of produce and isn't on the verge of bankruptcy like CA is.

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    Diamond hongkonger's Avatar
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    Quote Originally Posted by ftpjesus View Post
    Quote Originally Posted by PLOL View Post
    Lol, THIS. Seriously, what a dumb statement. "Everything you read"? What's that? Fox News? Compare taxes in Florida compared to California. Then compare incomes. You're way better off in California, unless you're retired
    Until the big one hits and drops the entire coastal region from LA to SF into the Pacific. 

    Although I'd say Florida not having a state income tax vs California's top rate of over 10% and CA base sales tax is 7% plus whatever local jurisdictions tack on while Floridas is 6% lower. There are admittedly a lot of shitty Jerry Springer types in Florida but it also produces a fair amount of produce and isn't on the verge of bankruptcy like CA is.
    The coastal region will slowly become an island. It won't be submerged, except due to climate change, which will affect Florida way more. Is waiting for the big one once or twice in a lifetime better or worse than sweating out a major hurricane once every couple of years? Depends on your perspective I guess.
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    Quote Originally Posted by tigerpiper View Post
    Class actions are a huge racket to enrich attorneys. I have some personal knowledge about this, and this case involving the allegation that Subway's footlongs were not a foot long.

    Thankfully the appeals court nixed this settlement which had NO consumer benefit.

    http://www.abajournal.com/news/artic...aign=most_read
    Agree. Class action law needs major reform.

    It's a good concept (the ability to sue companies for cheating a large number of people a small amount), but at the moment it enriches attorneys while getting almost nothing back for the consumer.

    I've mentioned before that two important changes are needed:

    1) Hard caps on the amount attorneys can recover for themselves -- both percentage-wise and hard-figure-wise. So, for example, attorneys should never be able to recover more than 40% of the proceeds OR more than $8 million (regardless of the percentage). I'm just throwing these numbers out, but it should be something like that.

    2) Disallowing companies to settle with anything besides cash -- or by being required to give a cash offer as an alternative to merchandise/service credits which is worth at least 50% of the value. For example, if your "settlement" involves giving you $30 of accessories from their cell phone store, you should have the opportunity to instead accept $15 cash.

     
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    Diamond Tellafriend's Avatar
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    And keeping in the spirit of druffs's post, I think it's absurd that poker players are allowed to play for and win such significant sums in illegal, online games of chance. They should be prosecuted and their money confiscated just like it is when gained from other illegal activites. Furthermore, even if the funds are won in legal games, we should limit the amount any one player is allowed to win in a particular session to 40% of their buy in.

    I don't practice this type of law and get the sentiment, but encourage you to come up with a better system to keep corporations in check. Also, fees are subject to a courts approval, which depending on the jurisdiction isn't always guaranteed- but guess what is ? That attorney's costs.

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    Quote Originally Posted by PLOL View Post
    This is just a California thing. And it looks like it's still being litigated. From what I understand it doesn't really look like Apple did anything wrong.

    I do get about ~$200/yr from class action settlements. It helps if you're willing to commit perjury for very little payoff.
    This is what reading too many shadyJ posts does to an otherwise honestish guy.
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    Owner Dan Druff's Avatar
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    Quote Originally Posted by Tellafriend View Post
    And keeping in the spirit of druffs's post, I think it's absurd that poker players are allowed to play for and win such significant sums in illegal, online games of chance. They should be prosecuted and their money confiscated just like it is when gained from other illegal activites. Furthermore, even if the funds are won in legal games, we should limit the amount any one player is allowed to win in a particular session to 40% of their buy in.

    I don't practice this type of law and get the sentiment, but encourage you to come up with a better system to keep corporations in check. Also, fees are subject to a courts approval, which depending on the jurisdiction isn't always guaranteed- but guess what is ? That attorney's costs.
    Come on now.

    When a company gets sued class action, settles for over $100 million, the law firm gets a large chunk, and the average consumer gets almost nothing (or worthless "services" they don't want or need), there's something very wrong with the system.

    I agree with class action in theory, but it's horrible in practice. It does very little to remunerate the consumer.

    Do you think the law firm would accept calling cards or cell phone accessories as payment? If so, why should I?

    Even with my suggested reforms, these lawsuits would still be quite lucrative for attorneys, yet the consumer would also get his fair share.

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