Oregon Department of Justice

Attorney General Ellen F. Rosenblum

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Attorney General Files Settlement Agreement Concerning Rite Aid's Misleading Billing Practices

December 4, 2000

Attorney General Hardy Myers today announced that Rite Aid Corporation and Thrifty Payless, Inc., a subsidiary of Rite Aid, have resolved allegations that Rite Aid pharmacists engaged in misleading billing practices in 1997 and 1998. An Assurance of Voluntary Compliance, which admits no violations of law, was filed today in Marion County Circuit Court.

"Certain cash-paying senior customers of Rite Aid were targeted by some pharmacists in an unusual billing practice in which consumers believed they were receiving discounts for prescription medicine," Myers said. "In fact, an undisclosed additional charge diminished or completely erased the value of any discount."

The Florida Attorney General's office brought Rite Aid's practice of using what it called "positive overrides" to the attention of Department of Justice investigators after Rite Aid moved into Oregon. According to records obtained from Rite Aid, it appears that more than 1,200 older Oregonians had ten percent senior discounts erased or diminished by "positive-overrides."

In transactions involving cash-paying customers, Department investigators determined that Rite Aid pharmacists were authorized to charge customers more than the customary price identified by the pharmacy's computer. The additional charge apparently was applied on an ad hoc basis.

Although Rite Aid discontinued its "positive-override" practices in 1998, the Department negotiated the agreement to prevent the practice from being re-instituted and to hold Rite Aid accountable for its past behavior.

In the Assurance of Voluntary Compliance, Rite Aid agreed to accurately represent the nature, existence or amount of any discount in cash transactions for prescription medicine. The company also will distribute thousands of 15 percent discount coupons on prescription medicine in the next 90 days. Coupons will be made available in Rite Aid's 75 Oregon stores and will be distributed in a circular advertisement through the Sunday Oregonian, Statesman-Journal, The Bulletin in Bend and Eugene Register-Guard newspapers.

Rite Aid also paid $25,000 to the Department's Consumer Protection and Education Fund.

Consumers wanting information on consumer protection in Oregon may call the Attorney General's Consumer Hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only) or toll-free at 1-877-877-9392 or online at oregon.gov.

Contact:

Jan Margosian, (503) 947-4333 (media line only) jan.margosian@doj.state.or.us |
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