State Watch

States see surge of scams, price-gouging tied to pandemic

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State law enforcement officers are seeing a surge of complaints about retailers hiking prices of essential goods and scammers preying on the elderly with fake messages about the coronavirus sweeping across the country.

In interviews, attorneys general across the country say their offices are being inundated with hundreds or thousands of new reports. In some cases, retailers and resellers are raising prices of basic supplies as Americans race to stock up.

“What we’re hearing and seeing right now is an uptick in price gouging reports,” said Connecticut Attorney General William Tong (D). “What’s happening is we’re seeing hand sanitizer for $20, $30 a bottle. We’re seeing water priced at a much higher rate than we would normally see. We’re seeing essential paper products, paper towels, toilet paper, six rolls for $30.”

Tong’s office has fielded more than 200 formal complaints, and his aides are looking into less formal complaints delivered through Facebook and Twitter messages.

In other cases, scammers are exploiting the loneliness created by social distancing to lure older people into handing over money, either for fake coronavirus cures or vaccines or by pretending to be from medical facilities in need of money.

Louisiana Attorney General Jeff Landry (R) said his office had heard of scammers who pretended to be from a hospital where a victim’s grandson was being treated for the coronavirus; the scammers asked for money to ensure the grandson got a ventilator. Tong’s office has received reports that scammers were offering fake coronavirus tests for hundreds or thousands of dollars.

“We should, when we catch some of these people, lock them up for the entire rest of their lives. This is no joke. This is the kind of thing that endangers people more,” Landry said in an interview. “They affect people at their lowest points.”

Several states have used the coronavirus pandemic to establish new hotlines and websites allowing consumers to report scams and gouging.

In Kentucky and Tennessee, the attorneys general contacted two brothers who had been stockpiling gloves and sanitizers along Interstate 75 with the intent to sell them later at excessive prices. The attorneys general convinced the brothers instead to donate their goods back to first responders; Kentucky’s half of the loot arrived last week, distributed to health care workers in seven counties.

“It’s unfortunate that we find ourselves in this circumstance. It’s unfortunate that some people try to take advantage of this circumstance,” Kentucky Attorney General Daniel Cameron (R) said in an interview Monday.

Some states have been so overwhelmed by calls to consumer protection hotlines that they have recruited outside help. In Michigan, Attorney General Dana Nessel (D) got help from several state legislators and Rep. Elissa Slotkin (D), who answered consumer calls over the weekend.

Major online retailers like Amazon, eBay, Walmart and Facebook have become breeding grounds for resellers who mark up essential goods in hopes of a quick profit, too. Several states are working with those companies to find and stamp out those who would profit from panic. In Missouri, Attorney General Eric Schmitt (R) said Friday his office had reached a deal with Amazon to monitor potential price gouging.

“When you have big marketplaces like Amazon or eBay or Facebook, we the office of the Attorney General are able to combat that, and we’re working very closely with them,” said Pennsylvania Attorney General Josh Shapiro (D), whose office has fielded more than 1,700 price gouging complaints. “They have been responsive when we’ve asked them.”

Shapiro is among a handful of attorneys general who have partnered with federal agencies and U.S. Attorneys offices in his state to monitor a growing number of cyber scams. He has established a state-federal task force with the FBI, the Department of Homeland Security and the United States Attorney for the Western District of Pennsylvania.

Florida Attorney General Ashley Moody (R) launched her own efforts with the state’s three U.S. attorneys to monitor new scams. Moody’s office said Monday that about 40 percent of the price gouging complaints her office had received came from online offers. Moody also created a rapid response team to get in touch quickly with the businesses accused of unfair price hikes.

Some states are targeting prominent conspiracy theorists who have used the coronavirus pandemic to hawk their own fake cures. New York Attorney General Letitia James (D) last week ordered InfoWars founder Alex Jones and Newsmax host Wayne Allyn Root to stop selling products they have claimed will cure or prevent the virus. James and Missouri’s Schmitt both ordered televangelist Jim Bakker to stop claiming his products offered a cure.

Several attorneys general said price gouging complaints could be difficult to prove, especially at times when demand spikes. In many cases, the retailer has to raise prices when a supplier increases wholesale prices. The retailer may not make any more money than before the price hike, but the consumer still suffers.

“Price gouging is a subjective test. We have to factor in market supply, demand, where the product is coming from,” Landry said.

Law enforcement officials urged consumers to let state governments decide what amounts to an unlawful price hike, and to help identify potential scofflaws.

“What I keep telling consumers is don’t get yourself caught up in doing math and figuring out the legal definition of price gouging. If something doesn’t look right, just let us know and we’ll do the work for you,” Pennsylvania’s Shapiro said.

In Kentucky, Cameron said: “The old adage, ‘see something, say something’ applies here.”

Tags Connecticut Coronavirus Elissa Slotkin Kentucky Louisiana Michigan New York retail Tennessee
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