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How to report price gouging during the coronavirus crisis

It seems some merchants are trying to take advantage of the coronavirus panic to unreasonably hike up prices of essential supplies

Summary

If you have been impacted by price gouging, you should file a complaint with relevant government agencies, such as your state attorney general’s office.  

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In these trying times of the coronavirus panic, it seems some merchants are trying to take advantage of the situation by hiking up prices on necessities to unreasonable levels.

Did you try to stock up as this emergency situation developed and find that the prices of goods such as toilet paper and hand sanitizers have moved up exorbitantly?

If you have been affected by such price gouging, there are consumer protections that you could avail of.

Check out all the answers from our credit card experts.

Ask Poonkulali a question.

Various states have their own definitions of price gouging

Each of the 34 states that have price gouging laws has its own definition of this practice. In some states, price gouging happens when prices go above a certain percentage limit during an emergency such as an earthquake, flood or, as in the current coronavirus pandemic, a disease.

California, for instance, defines price gouging as raising prices on any consumer goods and services by more than 10% after an emergency is officially declared. Other states such as Arkansas, Oregon and New Jersey also use this standard of hiking prices above a certain percentage limit as the test for price gouging.

In some other states, the standard for price gouging is just an increase in prices during an emergency. In Connecticut, for example, the standard is “increasing the price of an item for sale at retail by more than could be justified in the ordinary course of business market fluctuations.” Other states that go with a similar definition include Georgia, Hawaii and Kentucky.

There are also states that go with an “unconscionable,” “exorbitant,” or “grossly excessive” price increase during emergencies as their definition of price gouging. This group includes Alabama, Florida, Virginia and Texas.

The Visa card processing network also has rules related to surcharging, according to a spokesperson for the network. It expects retailers, as part of being a merchant that can accept payment using Visa-branded cards, to adhere to the network’s terms of service, which includes a definition for surcharging.

Coronavirus emergency spurs gouging in multiple states

It seems the evolving coronavirus situation has brought about price gouging in multiple states, according to various news reports.

The Maine Attorney General’s office is investigating such cases. For instance, there was an incident of a roll of toilet paper retailing for $10 at a Portland store. And the Texas Attorney General’s office reportedly received 255 price gouging-related complaints as of March 16.

Virginia’s price gouging laws are in effect due to its declared state of emergency. Attorney General Mark Herring noted in a news release, “When you’re trying to make sure that you and your family have all the necessities in order to protect yourselves against illness, the last thing you want to deal with is a scam or exorbitant price for a needed service or product.”

Virginia’s price gouging laws apply for a 30-day period after a state of emergency has been declared. Goods covered by this law include water, food, hand sanitizers, medicine and “personal protective gear.”

In Connecticut, the office of Attorney General William Tong has reported 71 complaints of big price hikes on goods such as hand sanitizers, disinfecting wipes and toilet paper since it went into a state of emergency. Instances include three-packs of disinfectant wipes selling for about $40.

It seems at least one online vendor tacked on a $200 “shipping fee” for a package of face masks, which was itself priced at $50. Attorney General Tong said, “Bad actors are using this pandemic to take advantage of the vulnerable and those who fear for their health and safety. We will not tolerate price gouging during this public health emergency, and we will take aggressive action to stop it.”

See related: How to manage your credit cards during the coronavirus outbreak

What should you do if you suspect you have been price-gouged?

Nessa Feddis, senior counsel for consumer regulations at the American Bankers Association, said, “Government agencies are responsible for enforcing anti-price gouging laws, and as part of an enforcement action they determine what restitution is appropriate and available to affected consumers.”

In Virginia, for instance, Attorney General Herring has urged consumers to contact his office if they suspect price gouging. Connecticut Attorney General Tong has also asked consumers impacted by such incidents to contact his office.

And Nevada Attorney General Aaron Ford said in a March 8 tweet, “We are cautioning all Nevadans to be aware of unusually high prices for consumer goods like hand sanitizer and protective masks due to #COVID19,” adding that those impacted should contact his office.

Penalties for those convicted of price gouging vary from state to state. This includes monetary fines of as little as $99 or as much as $50,000 for a first violation, with Texas allowing for up to $250,000 in penalties if the price gouging victim is older than 65 years. Perpetrators could also face jail time.

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