Price Gouging Complaints Surge Amid Coronavirus Pandemic

By Michael Levenson | March 27, 2020

In Florida, one seller was offering 15 N95 face masks on Amazon — for $3,799.

In Massachusetts, a convenience store was selling milk for $10 a gallon.

And in Minnesota, a smoke shop was charging $79.99 for 36 rolls of toilet paper.

Across the country, state attorneys general said this week that they had been flooded with complaints of price gouging and profiteering on items like hand sanitizer, disinfectant wipes and masks that have been in high demand and hard to find on store shelves. Many have also reported a surge in exorbitant price increases on everyday grocery items like chicken, rice and milk.

“This is something, I think, unlike anything we’ve seen in our state,” said Michigan’s attorney general, Dana Nessel, whose office has been inundated by more than 1,880 complaints of potentially illegal price increases — far more than those fielded during previous emergencies like a so-called polar vortex last year and a widespread power failure in 2003.

Ms. Nessel recently assigned a team of special agents to help her respond to the complaints.

“Our staff has been running around the clock,” she said. “It’s been really insane.”

One store had raised the price of lentils and rice by 60 percent, according to Ms. Nessel’s office. Another had opened a box of 10 dust masks that sells for $25 and was reselling them in Ziploc bags for $6 to $10 apiece. Consumers, she said, have also complained of unreasonable price increases on baby formula, diapers, toilet paper and beef.

Some businesses could be prosecuted criminally, officials said, although others were backing down after receiving cease-and-desist letters.

About 40 states have laws against price gouging, some of which were activated by emergency declarations issued by their governors in response to the coronavirus pandemic. Some of those laws define price gouging as an increase above a certain amount — such as 20 percent — since the emergency declaration was issued. Others ban price increases that are not deemed “reasonable.”

On Wednesday, more than 30 state attorneys general sent letters to Facebook, Amazon, Craigslist, eBay and Walmart urging them to crack down on price gouging. The attorneys general argued that it was “especially important” that “unscrupulous sellers do not take advantage of Americans by selling products at unconscionable prices” during the coronavirus pandemic.

“We just don’t want people exploiting others in this time of crisis,” said Maura Healey, the attorney general of Massachusetts, who on March 20 issued an emergency regulation banning “unconscionably high” prices in the state.

Ms. Healey’s office said it had received about 140 complaints of price gouging, including a report of a four-pack of toilet paper selling for $25 on eBay and pharmacies charging $30 for 8 ounces of hand sanitizer.

She said her office was investigating. Violators could be fined $5,000, she said.

“It’s OK to make money,” Ms. Healey said. “It’s OK to make a profit. But there is a line.”

The United States attorney general, William P. Barr, recently directed federal prosecutors across the country to prioritize fraud schemes related to the pandemic and to prosecute offenders.

“If you have a big supply of toilet paper in your house, this is not something you have to worry about,” Mr. Barr said at a White House briefing on Monday. “But if you are sitting on a warehouse full of surgical masks, you will be hearing a knock on your door.”

Amazon said it monitored price changes using manual and automated methods. It said it had removed more than half a million listings for price gouging and had suspended 3,900 sellers. The company said it had also worked with more than 40 attorneys general to hold predatory vendors accountable.

“There is no place for price gouging on Amazon,” the company said in a statement. “We are disappointed that bad actors are attempting to artificially raise prices on basic need products during a global health crisis and, in line with our longstanding policy, have recently blocked or removed hundreds of thousands of offers.”

In many states, regulators said they were racing to investigate the complaints pouring into their consumer hotlines.

New York City officials said Tuesday that they had issued 550 violations and $275,000 in fines to retailers accused of price gouging on items in high demand during the pandemic.

Wisconsin officials said they had sent cease-and-desist letters to 16 businesses suspected of illegally raising prices on N95 masks as well as basic food items like pinto beans, milk, limes, rice, water and cookies.

Kentucky’s attorney general, Daniel Cameron, said his office was scrambling to respond to 1,500 complaints of price gouging, most of them related to masks, hand sanitizer, gloves, wipes, paper towels and toilet paper.

“We’re all hands on deck in our office,” he said.

On Thursday, he issued subpoenas to six Amazon vendors suspected of raising prices by as much as 1,951 percent on essential medical supplies like hand sanitizer and masks. Amazon, he said, worked with his office to identify the top price gougers in Kentucky.

“The subpoenas we issued should serve as a warning to anyone who tries to illegally profit from Covid-19,” he said.

READ MORE FROM THE NEW YORK TIMES.

By Michael Levenson | March 27, 2020

In Florida, one seller was offering 15 N95 face masks on Amazon — for $3,799.

In Massachusetts, a convenience store was selling milk for $10 a gallon.

And in Minnesota, a smoke shop was charging $79.99 for 36 rolls of toilet paper.

Across the country, state attorneys general said this week that they had been flooded with complaints of price gouging and profiteering on items like hand sanitizer, disinfectant wipes and masks that have been in high demand and hard to find on store shelves. Many have also reported a surge in exorbitant price increases on everyday grocery items like chicken, rice and milk.

“This is something, I think, unlike anything we’ve seen in our state,” said Michigan’s attorney general, Dana Nessel, whose office has been inundated by more than 1,880 complaints of potentially illegal price increases — far more than those fielded during previous emergencies like a so-called polar vortex last year and a widespread power failure in 2003.

Ms. Nessel recently assigned a team of special agents to help her respond to the complaints.

“Our staff has been running around the clock,” she said. “It’s been really insane.”

One store had raised the price of lentils and rice by 60 percent, according to Ms. Nessel’s office. Another had opened a box of 10 dust masks that sells for $25 and was reselling them in Ziploc bags for $6 to $10 apiece. Consumers, she said, have also complained of unreasonable price increases on baby formula, diapers, toilet paper and beef.

Some businesses could be prosecuted criminally, officials said, although others were backing down after receiving cease-and-desist letters.

About 40 states have laws against price gouging, some of which were activated by emergency declarations issued by their governors in response to the coronavirus pandemic. Some of those laws define price gouging as an increase above a certain amount — such as 20 percent — since the emergency declaration was issued. Others ban price increases that are not deemed “reasonable.”

On Wednesday, more than 30 state attorneys general sent letters to Facebook, Amazon, Craigslist, eBay and Walmart urging them to crack down on price gouging. The attorneys general argued that it was “especially important” that “unscrupulous sellers do not take advantage of Americans by selling products at unconscionable prices” during the coronavirus pandemic.

“We just don’t want people exploiting others in this time of crisis,” said Maura Healey, the attorney general of Massachusetts, who on March 20 issued an emergency regulation banning “unconscionably high” prices in the state.

Ms. Healey’s office said it had received about 140 complaints of price gouging, including a report of a four-pack of toilet paper selling for $25 on eBay and pharmacies charging $30 for 8 ounces of hand sanitizer.

She said her office was investigating. Violators could be fined $5,000, she said.

“It’s OK to make money,” Ms. Healey said. “It’s OK to make a profit. But there is a line.”

The United States attorney general, William P. Barr, recently directed federal prosecutors across the country to prioritize fraud schemes related to the pandemic and to prosecute offenders.

“If you have a big supply of toilet paper in your house, this is not something you have to worry about,” Mr. Barr said at a White House briefing on Monday. “But if you are sitting on a warehouse full of surgical masks, you will be hearing a knock on your door.”

Amazon said it monitored price changes using manual and automated methods. It said it had removed more than half a million listings for price gouging and had suspended 3,900 sellers. The company said it had also worked with more than 40 attorneys general to hold predatory vendors accountable.

“There is no place for price gouging on Amazon,” the company said in a statement. “We are disappointed that bad actors are attempting to artificially raise prices on basic need products during a global health crisis and, in line with our longstanding policy, have recently blocked or removed hundreds of thousands of offers.”

In many states, regulators said they were racing to investigate the complaints pouring into their consumer hotlines.

New York City officials said Tuesday that they had issued 550 violations and $275,000 in fines to retailers accused of price gouging on items in high demand during the pandemic.

Wisconsin officials said they had sent cease-and-desist letters to 16 businesses suspected of illegally raising prices on N95 masks as well as basic food items like pinto beans, milk, limes, rice, water and cookies.

Kentucky’s attorney general, Daniel Cameron, said his office was scrambling to respond to 1,500 complaints of price gouging, most of them related to masks, hand sanitizer, gloves, wipes, paper towels and toilet paper.

“We’re all hands on deck in our office,” he said.

On Thursday, he issued subpoenas to six Amazon vendors suspected of raising prices by as much as 1,951 percent on essential medical supplies like hand sanitizer and masks. Amazon, he said, worked with his office to identify the top price gougers in Kentucky.

“The subpoenas we issued should serve as a warning to anyone who tries to illegally profit from Covid-19,” he said.

READ MORE FROM THE NEW YORK TIMES.