AG Grewal on Price-Gouging: Stop, or Face Consequences

Consumer Affairs Investigators Have Conducted 150+ Inspections, Issued 80+ Cease-and-Desist Letters

NEWARK – Attorney General Gurbir S. Grewal and the New Jersey Division of Consumer Affairs (“the Division”) today announced that the Division has sent or is sending more than 80 cease and desist and warning letters to businesses about which the Division has received complaints of price gouging or other consumer protection violations related to the COVID-19 pandemic. Meanwhile, the Division is dedicating its available resources to investigating complaints related to COVID-19, and keeping consumers informed about scam artists seeking to take advantage of consumers’ concerns about the virus.

“We are taking an all-hands-on-deck approach to consumer complaints about price gouging and other abuses related to the COVID-19 pandemic,” said Attorney General Grewal. “It’s times like these when the work of the Division of Consumer Affairs is most critical. People are looking to us for guidance and for protection, and it’s our job to be there for them in every way we can. I applaud the dedicated staff at the Division of Consumer Affairs, and their attorneys in the Division of Law, for their efforts to keep consumers safe during this difficult time.”

“As public concern grows, we have made it our top priority to use the Division’s resources to address emerging issues to protect consumers,” said Paul R. Rodríguez, Acting Director of the Division of Consumer Affairs. “Whether it’s protecting consumers from merchants who seek to prey on them financially or providing information and guidance to the licensed professionals they rely on for health care, we’re looking out for them.”

Update on Enforcement Efforts Related to COVID-19

The Division reports having logged a total of 619 complaints related to alleged COVID-19 price gouging or other consumer protection violations, as of 2:00 p.m. on March 17. The number of complaints has more than doubled since March 12, when the tally stood at 270. Nearly all of the complaints were received since March 4.

The complaints include allegations that retailers are unfairly raising prices on surgical masks, hand sanitizers, disinfectant sprays and wipes, food, bottled water, and other items being purchased by consumers worried about protecting themselves from the coronavirus.

The 619 complaints relate to a much smaller number of identifiable businesses, as some businesses have generated multiple complaints and some complaints have not included enough information to identify the business at issue.

DCA has sent approximately 82 cease-and-desist or warning letters to businesses about which it has received complaints, or is sending those letters imminently. In addition, DCA has completed at least 159 inspections, and has issued or will imminently issue 13 subpoenas for additional information.

The Division’s efforts have been bolstered by the participation of investigators from across the Division, including from its Professional Boards Enforcement Bureau, Office of Weights & Measures, and Bureau of Securities to assist investigators from the Office of Consumer Protection (“OCP”).

Attorney General Grewal and Acting Director Rodríguez kicked off the training for these investigators by emphasizing the importance of combatting price gouging and other consumer abuses at a time when it’s necessary for the country to come together as one.

Following the training session, dozens of OCP and redeployed investigators hit the streets to begin inspecting stores in response to consumer complaints.

In addition to investigating potential violations of the Consumer Fraud Act, the Division is investigating potential price gouging. Governor Phil Murphy triggered the State’s price gouging law on Monday, March 9, by declaring a state of emergency in response to the COVID-19 outbreak.

New Jersey’s price gouging law prohibits excessive price increases during a declared state of emergency and for 30 days after its termination. A price increase is considered excessive if the new price is more than 10 percent higher than the price charged during the normal course of business prior to the state of emergency.

Price gouging violations are punishable by civil penalties of up to $10,000 for the first violation and $20,000 for the second and subsequent violations. Violators may also be required to pay consumer restitution, attorney’s fees, and investigative fees, and be subject to injunctive relief. Each sale of merchandise is considered a separate violation.

Consumer Alert for Scams Related to COVID-19

Meanwhile, the Division is alerting consumers to be aware of a number of apparent scams related to COVID-19. To avoid this and some of the tactics being reported as possible scams, the Division recommends:

Don’t let CDC imposters into your home. Representatives from the Centers for Disease Control and Prevention are not going door-to-door seeking information or conducting surveillance on COVID-19. Imposters should be reported to local authorities and the Division.

Don’t fall for fake cures. Beware of in-store or online advertisements for products that claim to cure or prevent COVID-19 or other similar offers. No cure or preventative medicine has been approved for sale.

Look out for phishing emails. Cybercriminals may take advantage of global concern and interest in COVID-19 to try to convince email recipients to open links or attachments that may direct them to malicious websites or deliver malware. Stay away from COVID-19 related information that does not come from a trusted source, to avoid exposing your personal information.

Keep in mind not everything online may be factual. The internet is full of information, but be mindful of its accuracy. As false reports spread regarding the origination and spread of COVID-19, rely only on trusted sources for information.

Be wary of unsolicited calls. Whether they are offering health insurance, including to supplement Medicare or Medicaid benefits, or a cure or treatment for COVID-19, refrain from sharing your personal information over the phone, unless you have initiated the call.

Avoid internet adoption scams. Scammers are falsely misrepresenting themselves as CDC employees, and asking victims to send money overseas to adopt a pet being held at a quarantine station. The CDC does not quarantine pets or would not ask for payment to bring an animal into the U.S.

If you believe price gouging is occurring, contact the Division of Consumer Affairs at (973) 504-6240. A special voicemail box has been set up to address COVID-19 related price gouging complaints and will be checked regularly, even outside of normal business hours. Please leave your name, contact information, nature of the complaint, and the name and location of the business. Consumers should note the price of a good or service being sold, as well as the price prior to the declared State of Emergency, if known.

Consumers are also encouraged to file complaints online by visiting the Division’s website.