High court says grocery company was deceptive

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BY NANCY HICKS / Lincoln Journal Star

A California company has been ordered to pay $106,000 for court fees and restitution to 34 Nebraska consumers who were hoodwinked by a now-defunct Omaha company.

Jayco Acceptance Corp., which purchased installment contracts originally sold by the Omaha company, Consumer’s Choice Foods, is liable for the seller’s violations of consumer law, the Nebraska Supreme Court said in an opinion Friday.

Consumers who bought contracts for delivery of frozen foods, meats and dry goods were deceived in many ways, according to the court record.

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Consumer’s Choice Foods told consumers they would save time and money by signing installment food contracts, when in reality consumers saved neither, the court said.

Consumers testified in a 2006 trial they spent more money on food than they had before signing the contracts.

Consumer’s Choice Foods’ prices were higher than grocery store prices for the same products, they said.

One consumer used the Consumer’s Choice Foods point system to determine he paid $15 for a bag of brand-name hash browns that normally cost about $2 at a grocery store.

The court said the deceptive practices were aggravated by the fact the company had no intention of keeping its promises or agreements and continued to sell contracts even after it began to have financial difficulty and was going out of business.

Consumers were also told Consumer’s Choice Foods would provide each with a new freezer for free.

But they paid more than $4,000 over four years for freezers, which Consumer’s Choice Foods bought for $500 or less each, according to the court record.

“The record is replete with examples of deceptive acts on the part of CCF that were unethical and unscrupulous,” the high court said in an opinion upholding the decision of Lancaster County District Court Judge Steven Burns.

The suit was brought by the Nebraska Attorney General’s Office after receiving more than 120 complaints and was based, in part, on a 2002 undercover state patrol investigation.

That investigation included a video showing a Consumer’s Choice Foods representative stating the program would save time and money and that food costs would never increase.

“Justice has been served in this case, at long last,” said Attorney General Jon Bruning.

“We knew all along that this company cheated its customers. Now they need to pay up,” said Bruning, about the case which began in 2002.

Bruning said he had no sympathy for the California finance company that bought the contracts. The company should have known about the debt it was purchasing, he said.

The Supreme Court upheld the award of $96,308, plus interest to 34 consumers whose Consumer’s Choice Foods contracts were sold to Jayco.

Reach Nancy Hicks at 473-7250 or nhicks@journalstar.com.