Price-Gougers‌ ‌Face‌ ‌a‌ ‌Crackdown‌ ‌for‌ ‌Profiting‌ ‌on‌ ‌Coronavirus‌

March 31, 2020 by Tom Ramstack
Lysol products on a Costco store shelf.(Photo by Bnilsen)

WASHINGTON‌ ‌-‌ ‌Attorneys‌ ‌general‌ ‌nationwide‌ ‌are‌ ‌joining‌ ‌in‌ ‌urging‌ ‌companies‌ ‌that‌ ‌sell‌ ‌ online to‌ ‌stop‌ ‌price-gougers‌ ‌trying‌ ‌to‌ ‌take‌ ‌advantage‌ ‌of‌ ‌consumers‌ ‌during‌ ‌the‌ ‌coronavirus‌ ‌pandemic.

They‌ ‌are‌ ‌selling‌ ‌hand‌ ‌sanitizers,‌ ‌aerosol‌ ‌spray‌ ‌disinfectants,‌ ‌surgical‌ ‌masks‌ ‌and‌ ‌other‌ ‌devices designed‌ ‌to‌ ‌prevent‌ ‌the‌ ‌spread‌ ‌of‌ ‌germs‌ ‌at‌ ‌sometimes‌ ‌wildly‌ ‌inflated‌ ‌prices.‌ ‌

One‌ ‌ad‌ ‌on‌ ‌eBay‌ ‌this‌ ‌week‌ ‌advertised‌ ‌a‌ ‌four-pack‌ ‌of‌ ‌19-ounce‌ ‌Lysol‌ ‌spray‌ ‌for‌ ‌$175.99.‌ ‌

Letters‌ ‌sent‌ ‌last‌ ‌week‌ ‌by‌ ‌33‌ ‌state‌ ‌attorneys‌ ‌general‌ ‌to‌ ‌the‌ ‌chief‌ ‌executives‌ ‌of‌ ‌Amazon,‌ ‌Craiglist, eBay,‌ ‌Facebook‌ ‌and‌ ‌Walmart‌ ‌said‌ ‌they‌ ‌have‌ ‌“an‌ ‌ethical‌ ‌obligation”‌ ‌to‌ ‌stop‌ ‌the‌ ‌price-gouging.

The‌ ‌attorneys‌ ‌general‌ ‌want‌ ‌the‌ ‌companies‌ ‌to‌ ‌monitor‌ ‌sharp‌ ‌price‌ ‌hikes‌ ‌on‌ ‌essential‌ ‌medical supplies‌ ‌and‌ ‌remove‌ ‌the‌ ‌ads.‌ ‌They‌ ‌want‌ ‌them‌ ‌to‌ ‌open‌ ‌a‌ ‌portal‌ ‌for‌ ‌consumer‌ ‌complaints‌ ‌about price-gouging.‌ ‌

“These‌ ‌are‌ ‌just‌ ‌a‌ ‌few‌ ‌potential‌ ‌solutions,‌ ‌and‌ ‌we‌ ‌hope‌ ‌your‌ ‌company‌ ‌will‌ ‌put‌ ‌its‌ ‌considerable technological‌ ‌prowess‌ ‌to‌ ‌work‌ ‌…‌ ‌to‌ ‌better‌ ‌protect‌ ‌your‌ ‌customers,”‌ ‌the‌ ‌letters‌ ‌say.‌

Some‌ ‌prices‌ ‌for‌ ‌hand‌ ‌sanitizers‌ ‌listed‌ ‌on‌ ‌Craigslist‌ ‌and‌ ‌Facebook‌ ‌were‌ ‌running‌ ‌10‌ ‌times‌ ‌over their‌ ‌normal‌ ‌cost,‌ ‌the‌ ‌letters‌ ‌said.‌ ‌One‌ ‌in‌ ‌six‌ ‌of‌ ‌the‌ ‌highly-sought‌ ‌medical‌ ‌supplies‌ ‌sold‌ ‌by Amazon‌ ‌rose‌ ‌in‌ ‌price‌ ‌by‌ ‌at‌ ‌least‌ ‌50‌ ‌percent‌ ‌in‌ ‌February,‌ ‌according‌ ‌to‌ ‌a‌ ‌U.S.‌ ‌Public‌ ‌Interest Research‌ ‌Group‌ ‌report.‌ ‌

The‌ ‌companies‌ ‌are‌ ‌trying‌ ‌to‌ ‌reassure‌ ‌customers‌ ‌they‌ ‌try‌ ‌to‌ ‌protect‌ ‌them.‌ ‌Amazon‌ ‌said‌ ‌in‌ ‌a‌ ‌blog post,‌ ‌“Amazon‌ ‌has‌ ‌zero‌ ‌tolerance‌ ‌for‌ ‌price‌ ‌gouging‌ ‌…”‌ ‌

The‌ ‌company‌ ‌said‌ ‌it‌ ‌is‌ ‌“aggressively‌ ‌removing‌ ‌bad‌ ‌actors‌ ‌and‌ ‌offers.”‌ ‌It‌ ‌also‌ ‌is‌ ‌“collaborating with‌ ‌federal,‌ ‌state‌ ‌and‌ ‌local‌ ‌law‌ ‌enforcement‌ ‌agencies‌ ‌and‌ ‌policymakers‌ ‌to‌ ‌hold‌ ‌price‌ ‌gougers accountable,”‌ ‌Amazon‌ ‌said.‌ ‌

Walmart‌ ‌and‌ ‌eBay‌ ‌have‌ ‌given‌ ‌similar‌ ‌assurances.‌ ‌

Most‌ ‌states‌ ‌have‌ ‌laws‌ ‌that‌ ‌ban‌ ‌retailers‌ ‌and‌ ‌wholesalers‌ ‌from‌ ‌unfair‌ ‌pricing‌ ‌of‌ ‌essential products‌ ‌during‌ ‌emergencies.‌ ‌

The‌ ‌attorneys‌ ‌general‌ ‌in‌ ‌several‌ ‌jurisdictions‌ ‌say‌ ‌they‌ ‌plan‌ ‌to‌ ‌use‌ ‌them‌ ‌to‌ ‌prosecute‌ ‌the offenders.‌ ‌Many‌ ‌already‌ ‌have‌ ‌warned‌ ‌them‌ ‌through‌ ‌cease‌ ‌and‌ ‌desist‌ ‌letters.‌ ‌

In‌ ‌Washington,‌ ‌D.C.,‌ ‌seven‌ ‌retailers‌ ‌received‌ ‌warning‌‌ ‌‌letters‌‌ ‌from‌ ‌the‌ ‌city’s‌ ‌attorney‌ ‌general last‌ ‌week.‌ ‌The‌ ‌letters‌ ‌accused‌ ‌them‌ ‌of‌ ‌dramatically‌ ‌raising‌ ‌their‌ ‌prices‌ ‌“in‌ ‌violation‌ ‌of‌ ‌District‌ ‌laws‌ ‌protecting‌ ‌consumers‌ ‌during‌ ‌natural‌ ‌disasters.”‌ ‌

The‌ ‌letter‌ ‌gave‌ ‌them‌ ‌24‌ ‌hours‌ ‌to‌ ‌either‌ ‌lower‌ ‌their‌ ‌prices‌ ‌to‌ ‌levels‌ ‌before‌ ‌the‌ ‌coronavirus‌ ‌outbreak‌ ‌or‌ ‌give‌ ‌a‌ ‌reasonable‌ ‌explanation‌ ‌for‌ ‌what‌ ‌appeared‌ ‌to‌ ‌be‌ ‌price-gouging.‌ ‌Otherwise, they‌ ‌face‌ ‌unspecified‌ ‌“further‌ ‌action”‌ ‌by‌ ‌prosecutors.‌

One‌ ‌of‌ ‌the‌ ‌retailers‌ ‌was‌ ‌a‌ ‌beauty‌ ‌supply‌ ‌store‌ ‌that‌ ‌raised‌ ‌the‌ ‌price‌ ‌for‌ ‌eight-ounce‌ ‌bottles‌ ‌of‌ ‌hand‌ ‌sanitizer‌ ‌to‌ ‌$15.00.‌

In‌ ‌Pennsylvania,‌ ‌the‌ ‌attorney‌ ‌general‌ ‌has‌ ‌issued‌ ‌more‌ ‌than‌ ‌100‌ ‌cease‌ ‌and‌ ‌desist‌ ‌letters.‌ ‌They went‌ ‌to‌ ‌a‌ ‌grocery‌ ‌store‌ ‌selling‌ ‌a‌ ‌small‌ ‌case‌ ‌of‌ ‌water‌ ‌for‌ ‌$25‌ ‌and‌ ‌a‌ ‌drug‌ ‌store‌ ‌selling‌ ‌a‌ ‌small package‌ ‌of‌ ‌toilet‌ ‌paper‌ ‌for‌ ‌$21.99.‌

In‌ ‌Oregon,‌ ‌the‌ ‌state’s‌ ‌Justice‌ ‌Department‌ ‌accused‌ ‌four‌ ‌convenience‌ ‌stores‌ ‌of‌ ‌charging‌ ‌an “unconscionably‌ ‌excessive‌ ‌price”‌ ‌for‌ ‌toilet‌ ‌paper,‌ ‌bottled‌ ‌water‌ ‌and‌ ‌surgical‌ ‌masks.‌ ‌

Oregon‌ ‌Governor‌ ‌Kate‌ ‌Brown‌ ‌said‌ ‌coronavirus‌ ‌is‌ ‌causing‌ ‌an‌ ‌“abnormal‌ ‌disruption‌ ‌to‌ ‌the‌ Oregon‌ ‌marketplace.”‌ ‌

At‌ ‌the‌ ‌federal‌ ‌level,‌ ‌the‌ ‌Justice‌ ‌Department‌ ‌is‌ ‌preparing‌ ‌to‌ ‌prosecute‌ ‌profiteers,‌ ‌particularly online‌ ‌vendors‌ ‌of‌ ‌fake‌ ‌coronavirus‌ ‌cures‌ ‌and‌ ‌businesses‌ ‌that‌ ‌hoard‌ ‌medical‌ ‌supplies‌ ‌to‌ ‌resell them‌ ‌at‌ ‌dramatically‌ ‌inflated‌ ‌prices.‌ ‌ ‌

Attorney‌ ‌General‌ ‌William‌ ‌P.‌ ‌Barr‌ ‌said‌ ‌he‌ ‌is‌ ‌organizing‌ ‌a‌ ‌task‌ ‌force‌ ‌to‌ ‌prosecute‌ ‌persons‌ illegally‌ ‌stockpiling‌ ‌scarce‌ ‌medical‌ ‌supplies.‌

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