Dive Brief:
- Temu is being accused of acting in bad faith in dealing with customer complaints, according to court documents filed last week.
- The class action complaint is being brought by thousands of Temu customers who filed disputes with the American Arbitration Association. The disputes include claims that Temu engaged in false advertising and deceptive trade practices, as well as claims that the fast fashion giant unlawfully collected and disseminated customers’ private information.
- Temu allegedly refused to allow these arbitrations to proceed, saying it wasn’t required to participate until the court system ordered it to do so, per the filing. The class action complaint is asking the court for an order to compel Temu to participate.
Dive Insight:
Temu’s terms of use require that all disputes be handled through arbitration, per the filing. The terms additionally state that before a claim is filed, both the customer and Temu must conduct a settlement conference “in good faith to attempt to resolve the parties’ disputes.”
However, the complaint said that in at least one instance, Temu used a conference as a means of gathering information and scaring customers “with threats of sanctions should they proceed with their claims.” Attorneys for the plaintiffs said the Temu representative in question refused to have discussions and was not willing to answer any questions.
“Given Temu’s conduct, any additional conferences would be pointless and a waste of the parties’ time and resources,” attorneys for the plaintiffs wrote. “Temu has repeatedly shown that it has no intention to engage in good faith during the conferences.”
Many of the issues referenced in last week’s filing are also present in previous class action lawsuits Temu has faced.
In November 2023, Temu was accused of misleading customers about the scope and reach of its data collection. That case further alleged that Temu intentionally loaded malware and spyware on users’ devices. A few months later, Temu asked that the lawsuit be moved out of court and instead handled through arbitration.
Attorneys for the plaintiffs referenced this instance in last week’s complaint.
“In the AAA Arbitrations, Temu argued that the issue of whether the conference provisions were enforceable is for a court — and not an arbitrator — to decide," attorneys for the class action wrote in the complaint.
The attorneys added that when other consumers made the same argument in court, Temu took the opposite position.
“Unfortunately for consumers everywhere who were harmed by Temu, Temu’s scheme to create delays and prevent consumers from bringing their claims appears to be working,” the attorneys wrote.
A Temu spokesperson didn’t immediately respond to a request for comment.
