EXCLUSIVE: Caught on camera - the Zara price 'gouge': Trendy fashion store is STILL 'labeling in euros then charging in dollars' claims man at center of multi-million dollar suit

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Videos have been released online which claim to expose the 'deceptive' pricing practices of clothing company Zara - just days after the brand strongly denied it was duping customers in a 'bait-and-switch'.

Last week Zara was accused of deceiving millions of American consumers in a $5million class action lawsuit.

The suit - revealed exclusively by Daily Mail Online - alleges that the Spanish retail giant 'deceived' US consumers in a massive pricing scam through classic 'bait-and-switch' tactics that leads to people paying 'well in excess' of the tag amount.

A $5million class action lawsuit against Zara accuses the retail giant of 'deceiving' American consumers into paying more than they should

In a 'Zara Challenge' staff from a law firm at the head of the class action suit showed that the retail giant was over charging US customers by 55 per cent

It states that the 'fraudulent' pricing practices have been used across the US, enriching Zara to a tune of billions of dollars.

On August 22, four days after the suit was filed, Zara released a statement to vehemently deny it had engaged in 'deceptive pricing practices'.

It called the claims 'baseless', adding: 'We pride ourselves in our fundamental commitment to transparency and honest, ethical conduct with our valued customers.'

In response to the denial, Mark Geragos, from Geragos & Geragos, the firm leading the class action suit, decided to send his staff out to document the truth about the Zara pricing scam for all to see.

In a video released on YouTube, a worker at the law firm is shown visiting a Zara store in the LA area on August 25 to 'see if anything has changed'. 

A pair of shoes at the Los Angeles store were set at a price of €29.95, while US customers were being charged $59.95

Ultimately, the US customers were being charged $26.33 more than they should have been for the shoes

Another item at the retail store showed a price difference of 48 per cent between the euro and dollar price

The video - set to comedy music - begins by stating that since Zara 'thinks American consumers are stupid we decided to take the #ZaraChallenge and see how much we would be ripped off in 10 minutes of shopping.'

The video shows one item of clothing with the tag priced at Euros 29.95, while the actual price Zara charge is $49.90.

A 'Rip Off Amount', the video states, of $16.28 or 48 per cent.

The video then shows a pair of shoes priced at €39.99 on the tag.

The price in dollars, which American customers must pay, is $79.90, a 'Rip Off Amount' of $35.09 or 78 per cent, the video states.

The video details seven products in total during the #ZaraChallenge - showing customers are being ripped off to the tune of $175 or 55 per cent of the cost in euros of the products they viewed. 

A green jacket in the store had a price set at €59.95, but in dollars the price was set at $89.95

The law firm discovered that US customers were being overcharged by 34 per cent for the jacket

Ben Meiselas from Geragos & Geragos, one of the lead attorneys with Mark Geragos on the class action, told Daily Mail Online: 'Since Zara continues to deny that it price gouges the American consumer by tagging its products in euros and charging outrageously inflated amounts in dollars at the register, we have provided Zara with some educational videos for it to take back to the boardroom.

'Astonishingly, even after Zara denied its deceptive pricing practices last week, Zara doubled down on treating the American consumers as fools and continued the same pricing practices across its US stores.

'We have issued the #ZaraChallenge as a rallying call for consumers to document Zara's conduct and hold Zara accountable until it is willing to become a responsible corporate citizen, exercise transparency in pricing, and treat the American consumer with dignity and respect by repaying all of the money it has taken from its bait-and-switch scheme.'

According to the lawsuit Zara USA Inc perpetuates its 'deception' in two ways. 

Another pair of shoes at the store showed a price of €39.99 for European customers and $79.90 for US customers

The difference amounted to $35.09 between the price tags, or a 78 per cent increase for US customers

On August 22, four days after the suit was filed, Zara released a statement to deny it had engaged in 'deceptive pricing practices' (file photo)

The firm tags clothing only in euros, which is itself confusing to many consumers, and lures them to the register.

But to make matters worse, the suit claims, not only is the same product sold for a substantially higher amount in dollars, but the product is always sold well in excess of the true converted amount, if it were to be converted using that day's foreign currency rates.

This dodgy practice is known as 'bait-and-switch' in the fashion industry.

The second 'deception', according to the suit, is the practice of 'cover-up pricing' - where the Euro price is covered with a dollar sticker.

In those instances, the suit claims, the dollar amount is almost always applied in the form of a pricing label stuck over the euro price printed on the tag. 

Another video purports to show a Zara staff member at a store in Sherman Oaks, California, talking about not having a 'conversion device'

The video starts by pointing out how Zara denied any allegations of 'deceptive pricing practices' before turning to the employee speaking on the phone

The store rep is heard speaking to a customer about the comparison of US and European pricing

The store rep is heard telling customer on the phone: 'The only thing that we can do is sell it at the price it's ringing up. So that's US currency that's coming up.'

The suit claims the dollar amount is way above the true converted amount if the euro price were properly converted to dollars.

According to the 26-page suit, Zara is violating State and Federal law by luring consumers to the register by using these confusing foreign currency tactics and then duping them into thinking they are paying less.

In fact, Zara is slapping a huge markup on the price without telling the consumer, the suit claims.

The legal documents go on to allege that Zara has also 'perpetuated a corporate policy of misinforming consumers' who do ask why the cost of clothing they bought is more than the tag price.

Zara customers are told that the markup is based on a conversion rate at the time the clothing was manufactured - which is false, the suit claims.

The suit was filed in California by high-profile Los Angeles attorney Mark Geragos on behalf of a man called Devin Rose and potentially millions of other customers against Zara USA Inc. 

A sequin sweater at Zara was priced at $169, but when a sticker was removed, a price of €89.95 was revealed. Using Monday's conversion rates, it should have been priced at $100.63, but instead saw a $68 increase

A blue dress at a Manhattan location of the store saw an 11 per cent price increase when the price was changed from euros to dollars

A black sweater dress was priced at $99.90, but a euro price below revealed a much lower price of €59.95, or based on Monday's exchange rate, $67.07

Rose, angered by Zara's denial, released a second video to prove his claims.

The video, also released on YouTube, purports to show a Zara staff member at a store in Sherman Oaks, California, talking about not having a 'conversion device' and 'not inputting amounts correctly in the system and Zara can't control the items in its store'. 

The video starts by pointing out how Zara denied any allegations of 'deceptive pricing practices'.

It added: 'Since Zara thinks American consumers are stupid, now is probably a good time to show them this.'

The store rep is heard telling customer on the phone: 'No we don't convert it. Unfortunately we don't have the device to convert it. So the only thing that we can do is sell it at the price it's ringing up. So that's US currency that's coming up.'

The customer is complaining of the same thing Mr Rose complained of and he captured the moment on his camera phone while waiting for the store manager.

The rep then told the customer that maybe the price wasn't 'inputted correctly', or the sticker fell off, adding: 'Unfortunately we can't control every single item in the store'. 

A black, floor-length dress was at the store priced at $69.90, a far cry from the euro prices revealed underneath 

One sticker on the dress showed a price of €49.95 - or $55.88 based on Monday's exchange rate - and another showed a price of €39.95, or $44.69 based on Monday's exchange rate

A leather skirt in the store was priced at $39.90, seeing a 20 per cent increase from it's value in euros

If the tag followed Monday's exchange rate, the €29.95-priced skirt should cost $33.51, six dollars less than the listed price

The video - also set to comedy music - ends with: 'Zara has some splainin' to do!'.

Zara, which began business in 1975, is a leading global fashion brand with more than 2,100 stores in 88 countries.

The firm markets its clothing as high end fashion at affordable prices and is hugely popular with A-list celebrities including Kim Kardashian, Katie Holmes and Kate Middleton.

The lawsuit uses Devin Rose as an example in detailing the alleged mass deception.

Rose purchased three shirts from a Zara retail store in Sherman Oaks, California, on May 17 this year.

The suit states that Rose was drawn in by the low cost of the shirts, each displaying a price of just '€9.95' on its tag.

But Rose paid for the shirts he discovered, to his dismay, that he had actually been charged $17.90 for each one.

He immediately questioned the cashier about this and was told that the price difference was due to the conversion rate between euros and dollars.

The suit states that at the time Rose bought the shirts, the actual euro-dollar exchange rate would have meant his €9.95 shirts would have cost around $11.26 each.

Zara customers are told that the markup is based on a conversion rate at the time the clothing was manufactured - which is false, the suit claims

In some instances, the suit claims, the Euro price is covered with a dollar sticker on the price tag. But the suit claims products are sold well in excess of the true converted amount, if it were to be converted using that day's foreign currency rates

The retail giant is a favorite of Kim Kardashian (pictured above in 2009 carrying a bag from the store)

Singer Selena Gomez (left in 2008) and actress Penelope Cruz (right in 2011) appear to be avid Zara shoppers. A lawsuit against the store states that the 'fraudulent' pricing practices have been used across the US, enriching Zara to a tune of billions of dollars

Instead, Zara charged him $17.90 per garment - a markup of nearly 60 per cent.

The suit added: 'Upon further investigation, Zara has been engaged in such fraudulent pricing practices across the United States.

'On average, consumers are being charged $5 to $50 more than the lowest tag price in euros. 

'In the aggregate, the shopping experiences of ordinary consumers like Mr. Rose, have resulted in Defendant Zara being unjustly enriched to the tune of billions of dollars.'

It's not the first time Zara has found itself in legal hot water.

According to Refinery29, the Spanish retailer settled a $1.6million class-action lawsuit for violating the Fair Credit Reporting Act in November last year.

Receipts printed between December 17, 2014, and April 27, 2015, had the first six digits of shoppers' credit card numbers on them when only the last four digits are allowed by law to be included.

Zara agreed to pay out customers up to $100 for each transaction.

The suit uses Devin Rose as an example, who purchased three shirts from a Zara retail store on May 17 this year. The suit states that Rose was drawn in by the low cost of the shirts, each displaying a price of just '€9.95' on its tag. But Rose was charged $17.90 for each one

Katie Holmes and Kate Middleton (both wearing Zara) also appear to be fans of the retail giant

The lawsuit was filed Friday in California Federal Court, Central District.

Ben Meiselas, the other lead attorney with Mark Geragos, told Daily Mail Online: 'We are hopeful this class action will compel Zara to stop its unlawful pricing practices of charging substantially in excess of the tagged prices on its clothes which, on average has caused American consumers to pay $5 to $50 more per item, and billions of dollars in the aggregate.'

While a spokesperson for Zara USA said: 'Zara USA vehemently denies any allegations that the company engages in deceptive pricing practices in the United States.

'While we have not yet been served the complaint containing these baseless claims, we pride ourselves in our fundamental commitment to transparency and honest, ethical conduct with our valued customers.

'We remain focused on providing excellent customer service and high-quality fashion products at great value for our customers. We look forward to presenting our full defense in due course through the legal process.'

Zara's 'fast fashion' business model has helped to make it one of the world's biggest clothing brands, with owner Inditex focusing on large, flagship stores and its online operation in recent years.

The group currently has 71 Zara stores in the United States.

The lawsuit mentions that the clothing brand is 'purchased and worn by numerous high profile celebrities', and features photos of Kate Middleton and Kim Kardashian