Petco Agrees to Pay $1.75M

By Wendy Fry
|  Wednesday, Jun 2, 2010  |  Updated 4:54 PM PDT
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CHICAGO - JULY 14: Emily Sipos with her puppy Sadie makes a purchase at a Petco store July 14, 2006 in Chicago, Illinois. Texas Pacific Group and Leonard Green & Partners LP agreed to acquire the animal supplies retailer for $29 a share, 49 percent more yesterday's closing price. (Photo by Scott Olson/Getty Images)

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 Prosecutors in five California counties say Petco Animal Supplies Inc. has agreed to pay $1.75 million to settle a lawsuit alleging the company overcharged customers and improperly cared for animals it offered for sale.

The San Diego- based company was accused of  providing inadequate animal care and overcharging customers.

State and county investigators in Marin, San Mateo, Santa Barbara, Los Angeles and San Diego found animals were neglected and mistreated, according to the San Diego DA's office. In some cases, the animals were for sale even though they were sick and in need of veterinary care.

San Diego Superior Court Judge Richard Whitney approved the settlement Tuesday. Though Petco did not admit liability, it did agree to implement daily animal and habitat inspections, comprehensive employee training and to provide prompt veterinary care for sick or injured animals, according to the San Diego District Attorney's office. The company will also be required to institute more extensive policies to ensure pricing accuracy. Under the terms of the court order, if a customer is overcharged, the store must deduct $3 from the lowest advertised price. If the item costs less than $3, the store must give it to the customer for free. This policy will be in effect for five years.

State and county inspections of Petco stores in Marin County found animal habitats were not adequately cleaned or maintained as required by California's Pet Store Animal Care Act, according to the lawsuit. Another investigation revealed that Petco failed to remove expired price tags from store shelves and overcharged customers on such bulk sale items as dog biscuits and pet treats.

Investigations were conducted throughout California from 2005-08. The company paid more than $850,000 to resolve similar allegations in a 2004 law enforcement case brought by California prosecutors.

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