LeEco Free Phone Campaign Blunder May Cost USD138,000 in Class Action Suit

(YicaiGlobal) Feb. 27 — Beijing-based Leshi Holding Co. was named in a class action filed by 80 people due to an advert which offered LeTV smartphone to all eligible users before being changed to be available only to a limited number of users on a first-come, first-served basis.

Four defendants have been named, Leshi, LeTV Information Technology Beijing Co., [SHE:300104], Leshi Zhixin Electronic Technology Tianjin Co. and Leshi Haiyun Culture Media Beijing Ltd., China Youth Daily reported today. All companies fall under the LeEco brand.

The campaign, launched by LeEco’s official community LeMe, recorded 1.6 million page views and 376,000 responses during China’s Lunar New Year. Most users who signed in for 16 days in a row, as outlined by the campaign, found they were unable to obtain the LeTV phones as promised. Some 80 people have filed a consumer fraud lawsuit against the company, for total compensation of CNY950,000 (USD138,000).

“The flaw in this campaign was a result of copywriter negligence,” LeEco’s litigation agent said.
On Feb. 4, LeMe launched a campaign saying all LeEco users who signed in for 16 consecutive days, from Feb. 7 to Feb. 22, could get a LeTV phone at its online store at 12.00 on Feb. 25. Users later found they couldn’t, and saw the event announcement had been changed to remove the word “all” and add in that the number of phones would be limited and on a first-come, first-served basis.
LeEco’s litigation agent explained that the alteration was made due to the copywriter’s negligence. A representative had previously said “It was an editing mistake, which was not discovered until the server crashed on Feb. 25 when the exchange began.”

LeMe’s acting attorneys Zuo Shenggao and Xu Hao, from Jingsh Law Firm, said “the 80 complainants asked the defendant to fulfill its obligation to ‘exchange a CNY3,999 (USD582) LeTV phone to each plaintiff,’ and believed that the defendant’s actions constituted consumer fraud, so it should compensate each person three times the cost of the phone, CNY11,997.”

Zuo believes the LeEco users mentioned in the campaign refer to a special group of consumers who had previously bought LeEco’s products or services and signed in for 16 days in a row over the holidays to get ‘money’ in exchange for a LeTV phone. LeEco’s inconsistency in the campaign rules is actually the consumer fraud referred to in the Law of the People’s Republic of China on the Protection of the Rights and Interests of Consumers, he added.

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