Iowa attorney general sues Temu, alleging deceptive sales, data theft

• Iowa’s Attorney General is suing online retailer Temu for alleged violations of the state’s Consumer Fraud Act.
• The lawsuit accuses Temu of deceptive marketing, selling counterfeit goods, including fake Iowa-branded merchandise, and fabricating sales.
• Temu is also accused of using its mobile app to secretly collect user data without consent.

Online retailer Temu has sold cheap and counterfeit goods, used underhanded marketing tactics and lied about when and how it takes customers’ data, Iowa Attorney General Brenna Bird says.

Bird is suing the China-based retail giant, accusing it of numerous violations of the Iowa Consumer Fraud Act. Temu, which has aggressively been promoted in the United States under its “Shop like a Billionaire” tagline, competes with Amazon and other online retailers and operates online marketplaces for third-party sellers.

The lawsuit, filed July 1, cites years of complaints to the Attorney General’s Office, Better Business Bureau and other watchdog groups about the quality and reliability of Temu shopping, with reports often citing purchased merchandise that bear little resemblance to the photos of items offered for sale.

Those complaints are just the tip of the iceberg, Bird alleges. Her suit accuses Temu of dishonest pricing practices, such as labeling items for sale despite listing them at their normal price. Temu also allegedly uses “gamification” tricks to encourage users to make purchases, sign up their friends on Temu, and other actions, but often fails to deliver on the promised benefits, it says.

In some cases, the company is accused of simply fabricating sales. “Numerous” Iowans have reported receiving and being charged for Temu packages they never ordered and were unable to return, the complaint alleges.

The company also has lied about its business practices in other ways, including covering up its use of forced labor to manufacture many of the items it sells, Bird claims.

App allegedly violates data privacy laws

Temu isn’t just angling to make a sale, Bird claims. She also accuses the company of vacuuming up customers’ private data, even hiding code in the company’s mobile apps to bypass users’ cell phone security and collect private data without their consent.

The complaint states that forensic experts retained by Iowa found the app collects data far beyond what might be necessary to complete transactions, conceals its exfiltration of sensitive data and “reconfigures itself even after having been downloaded to a user’s phone” without consent.

Much of this echoes code previously found in Pinduoduo, another e-commerce app owned by the same Chinese conglomerate, which was banned from the Google Play store in 2023 due to malware concerns. Many of those programmers, and much of the banned code, has been transferred to the Temu app, Bird claims.

Iowa Wave among fake merch sold on Temu

Temu often has been accused of violating intellectual property laws, and those practices have directly affected Iowa, Bird claims. The complaint includes examples of unauthorized University of Iowa, Iowa Wave and Dowling Catholic clothing.

Bird notes in her complaint that a portion of sales of authentic Iowa Wave merchandise goes to benefit pediatric cancer patients and others at the Iowa Stead Family Children’s Hospital.

Iowa businesses and sellers on other marketplaces also have reported Temu stealing their branding and in some cases simply copying their product photos and descriptions to market unauthorized products.

Iowa joins several states, including Oklahoma, Texas and Nebraska, that have filed consumer protection lawsuits against Temu in recent months. Temu did not respond to a message seeking comment.

William Morris covers courts for the Des Moines Register. He can be contacted at wrmorris2@registermedia.com or 715-573-8166.