Thursday, 19 Sep 2024

Coronavirus: US states pursue more than 5,000 complaints of price gouging

NEW YORK (BLOOMBERG) – Almost 6,000 price-gouging complaints have poured in to authorities across the US in the past month, with outrage at everything from US$80 (S$115.77) hand sanitiser to a 50 per cent hike in rice prices.

Now, as Americans hunker down and hoard to survive the coronavirus pandemic, state attorneys-general and regulators are rushing to stamp out exploitative pricing.

They’re poring over e-mails, sending inspectors to check out tips and firing off cease-and-desist letters, according to an analysis of data and reports from more than 40 states that turned up some 5,700 complaints.

In Washington, the state with the first confirmed case of the virus in the country, Attorney-General Bob Ferguson is sending a team of 10 investigators to stores to examine products on the shelf and issuing subpoenas to websites.

“Washingtonians are facing a life-and-death situation” and need access to “critical goods”, Mr Ferguson said in an interview.

“My mum is 91 years old. It’s important for individuals like my mum to have access to hand sanitiser. They can cost 60 bucks for a four-ounce container.”

The complaints spiked after President Donald Trump declared a national emergency last Friday, leading many state and local governments to do the same.

They come as authorities in Europe grapple with similar concerns. On Friday, the UK’s competition regulator launched a task force to crack down on such exploitation. The European Union’s anti-fraud office said it’s probing sales of fake medical and personal protection products.

While some US states already have laws on the books that ban price gouging, generally defined as boosting a price 10 per cent or more in a crisis, emergency declarations often trigger temporary measures.

The Oregon AG’s office on Wednesday got a complaint about a supermarket in Beaverton selling 20 pounds of rice for US$29, almost US$10 more than usual, according to spokeswoman Kristina Edmunson, who said the office was preparing its first cease-and-desist letters.

Twitter was rife with hashtags such as #pricegouging and #panicbuying.

Users called out two-pack face masks at US$19.95, up from US$1.50, and 12 jumbo rolls of Kroger toilet paper on eBay for US$99.95 plus US$11.75 for shipping – or best offer.

“I’m outraged that anybody would try to profiteer on a crisis, particularly on items that are necessary for the health and safety of Ohioans,” Attorney-General Dave Yost said in a statement on Thursday.

“We don’t have a price-gouging law in Ohio because we believe in free markets, but free markets don’t include the idea of holding toilet paper and surgical masks hostage.”

Most of the complaints are in the East, with New York topping the list at 1,350.

In New York City alone, the Department of Consumer and Worker Protection has received more than 1,000 calls since March 5, when the city’s first rule against virus-related price increases was enacted.

In addition to a 1.2-litre bottle of hand sanitiser for US$79.99 at a hardware store in Midtown, New Yorkers could snap up a box of 100 disinfectant wipes at a drugstore in Chelsea for US$100.

In Pennsylvania, No. 2, Attorney-General Josh Shapiro has gotten more than 1,100 tips on overpriced goods. Texas came in third, with more than 750 reports. California declined to give a number.

Ohio, which like Washington has received at least 150 reports of gouging, doesn’t have a specific statute but does ban sales practices that “could be considered unconscionable if the business knew at the time of the sale that the price was substantially higher than normal”.

Mr Yost said he’d push for a law as soon as next week.

At least 35 states do have detailed laws against price gouging. Civil penalties range from US$99 to US$250,000, hitting that maximum in Texas if the victim is at least 65 years old, and criminal penalties run from six months to 10 years in prison.

In Tennessee, Attorney-General Herbert Slatery III ordered two brothers to stop buying and selling medical products pending an investigation after the New York Times reported on a scheme to scoop up more than 17,000 bottles of hand sanitiser.

The brothers had their listings pulled by online merchants including Amazon and eBay after the sites began cracking down on sellers of virus-related goods.

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