CHICAGO (CBS) – Customers are looking for great deals from online discount retailer Temu. However, a class action lawsuit claims that Temu is getting much more in return, and buyers are often unaware of the company's data collection and sharing policies and activities.
Class Action Lawsuits
The complaint was filed in Illinois in November by the Hagens Berman Law Firm on behalf of seven named plaintiffs from Illinois, California, Massachusetts and Virginia, as well as unnamed others in similar situations.
The lawsuit alleges that Temu violates its customers' privacy rights by collecting private data and using “deceptive” and “unscrupulous” practices to access that data.
Attorneys for the plaintiffs in the lawsuit claim that experts, including their independent expert, reviewed the Temu app and found that “the app is deliberately and intentionally loaded with tools to execute virulent and dangerous malware and spyware activities on users' devices.” users” and concluded: “Temu misled people about how it uses their data.”
“We believe it's intentional,” said Jeannie Evans, one of the plaintiffs' attorneys.
In the complaint, Evans said, “We discussed how Temu requests at least 24 permissions for all types of information that would not be necessary for an online shopping app.”
According to the complaint, those permissions include access to Bluetooth and Wi-Fi network information and biometric data such as fingerprints.
A second class action lawsuit, filed in New York state in September 2023 on behalf of plaintiff Eric Hu and others, accuses Temu of collecting private customer information and failing to keep it secure.
Hu vs. Temu and others alleges: “Defendant flagrantly failed to comply with security standards and allowed its customers' financial information to be compromised, all in an effort to save money by cutting security measures that could have prevented or mitigated the breach.”
That complaint notes that many customers report to the Better Business Bureau that their credit card and banking information has been sold or leaked after using those accounts at Temu.
Miguel Koenig of Michigan is not a member of any of the class actions. But he reached out to CBS 2 investigators.a warning from the Better Business Bureau (BBB) regarding Temu in September 2023.
At the time, BBB said Temu, a Chinese company, was warning buyers about customer complaints and privacy concerns. BBB had received 900 complaints in the company's first 14 months of operation.
Koenig says he downloaded the Temu app, created an account and provided Temu with his banking routing information to facilitate future purchases, “so you don't have to keep entering a debit card,” he said.
He bought several products for around $45.
Then he said he noticed something unusual. She pulled out the email he sent to Temu about the sudden unknown charges on his bank account.
“There were about 17 different charges…about $2,300 that went missing,” Koenig said.
He said he fought those charges with his bank.
Koenig also complained about a flood of emails from other places, not Temu, about credit offers.
“I mean, every day I get a letter saying, 'You just got approved,' and I never signed up for anything,” he said.
Attorney Jeannie Evans says these are common problems.
“We have spoken to many members of the Temu platform and have heard similar reports,” Evans said.
In the class action lawsuit, Evans' firm details how they believe problems like those occur when buyers download the app.
Specifically, Evans mentioned, “You can get access to your phone's camera; your phone's microphone that could be collecting biometric information, facial images, voice prints.”
Temu began operations in September 2022.It is part of PDD Holdings.
“We categorically deny the allegations and intend to vigorously defend ourselves against these baseless claims. The complaints repeat a report published by a short seller, calling itself Grizzly Research, who has an obvious incentive to try to drive down Temu's stock price through misinformation. The report even includes a warning that its contents are “not a statement of fact.”
“We do not sell customer data to third parties.”
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