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LivingSocial Sued by Customer Over Coupon Expiration Dates

May 2 (Bloomberg) -- LivingSocial, the second-largest Internet coupon site, was sued by a customer in Minnesota over claims the company violates federal and state laws prohibiting the sale of gift certificates with expiration dates.

LivingSocial misled “tens of millions of consumers nationwide” by creating a sense of urgency with mass “Daily Deal” e-mails promising bargains for buyers who acted fast, customer Amy Schultz said in her complaint. Consumers were rushed into buying gift certificates they wouldn’t have time to use, she said.

“LivingSocial and its retail partners bank on the fact that consumers often will not redeem ‘livingsocial’ gift certificates before the limited expiration period,” her attorneys said in the April 29 complaint. “Therefore, many consumers are left with nothing, despite having already paid for the particular service or product.”

Schultz filed the lawsuit on behalf of all LivingSocial customers nationwide, asking the federal court in Minneapolis to allow her to pursue the claim in a group, or class-action, suit.

Maire Griffin, spokeswoman for Washington-based LivingSocial, didn’t immediately respond to an e-mail for comment. LivingSocial is the second-largest online coupon site, behind Groupon Inc.

The case is Schultz v. Hungry Machine Inc., 11-cv-01136, U.S. District Court of Minnesota (Minneapolis).

To contact the reporters on this story: Beth Hawkins in St. Paul, Minnesota, at hawkins@visi.com.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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