Koster files motion to hold Walgreens in contempt

Missouri Attorney General Chris Koster filed a motion in Jackson County Circuit Court to hold Deerfield, Ill.-based Walgreen Co. (NYSE: WAG) in contempt for allegedly violating the terms of a settlement reached last summer.

In the June 2014 settlement, Walgreens agreed to end deceptive advertising and pricing schemes discovered a year earlier by Koster’s office. His officials found Walgreens stores statewide advertised lower prices on display tags but charged higher prices at checkout. The company also agreed to pay for an independent auditor to audit at least 25 percent of its Missouri stores each quarter for the next three years.

Yesterday, Koster said his office uncovered evidence of Walgreens stores continuing to overcharge customers, according to a news release.

Koster’s officials visited 50 Walgreens stores - including one each in Springfield, Nixa and Branson - July 26-Sept. 1 and found over 1,300 expired tags at 49 of them. Hundreds of the tags were weeks past their expiration dates, and two had expired in 2013. The court order last year required Walgreens to remove tags within 12 hours of their expiration, according to Koster’s office.

“My office’s 2013 investigation showed a relationship between expired tags and consumers being overcharged at the register,” Koster said in the release. “Consumers should not have to dig through outdated and incorrect information to find out the true price of any item.”   

Koster’s contempt motion filed yesterday asks the court to fine Walgreens up to $5,000 for every expired tag discovered by investigators during the latest round of inspections, plus an additional penalty for every day an expired tag is found in a store in the future, according to the release.

Walgreens already has paid Missouri $136,500 for pricing violations found in the independent audits required by the 2014 settlement. In the audits, 30 stores failed and several did so more than once. One store failed six times in a row. Walgreens stores failed 53 audits in the last year, Koster said.

Koster encourages customers who see expired or incorrect tags at Walgreens stores to take a picture and send it to Koster’s office at Ago.Mo.gov.