Price Gouging During Coronavirus a Possible Felony

Price gouging during COVID-19Since the coronavirus swept through the U.S., hand sanitizer, masks, cleaning, and paper products have vanished from retailers’ shelves nationwide. In the wake of this crisis, entrepreneurs have jumped at the opportunity to grab as many of these highly sought-after products to sell them online at absurdly high prices. With an increasing number of entrepreneurs using online retailers to price gouge consumers, 33 state attorneys general have taken a stand to put a stop to this exploitative act that can result in a possible felony. 

Which Companies Have Been Accused of Price Gouging?

On March 25, the state attorneys general sent a letter to Facebook, Amazon, eBay, Craigslist, and Walmart with a request for a more thorough job policing COVID-related price gouging. Examples of price-gouged items found on online retailer platforms include:  

  • A two-liter bottle of hand sanitizer on Craigslist sold for $250
  • An eight-ounce bottle of hand sanitizer listed on Facebook Marketplace for $40
  • Face mask packs selling on multiple retailers for $40-$50

The price of hand sanitizers and face masks more than doubled on most listings after the World Health Organization declared a global health emergency. In the letter to the five companies, the attorneys general wrote:

“While we appreciate reports of the efforts made by platforms and online retailers to crack down on price gouging as the American community faces an unprecedented public health crisis, we are calling on you to do more at a time that requires national unity.”

In response to this letter, many companies have made recent attempts to improve the policing of these violators. For example:

  • Amazon suspended almost 4,000 accounts for breaking their fair pricing policies
  • Facebook released a statement on its website about how it’s combating misinformation
  • eBay communicated to sellers that it would block new listings for face masks and hand sanitizer
  • Walmart claimed to monitor its site for unsubstantiated inflated prices and medical claims

What are the Guidelines for Price Gouging?

The guidelines for price gouging vary from state to state. Consumers are asked by each state attorney general to report possible price-inflation violations to their offices. Determining whether an item is a case of price-gouging can’t be described in a quick and easy formula. Just because an item now costs more doesn’t mean it automatically needs to be reported. According to Barry Moore, spokesman for the Better Business Bureau:

“If you buy a whole case of $3-a-bottle disinfectants, but then you go online and you’re selling them for $25 and $50, and $100 a bottle, that’s going to be price gouging, and there are laws against that.”

Moore further explained that a product priced at two to three times its regular retail price is probably not going to be considered price gouging. He compared these items to the way hotel rooms are priced on high-capacity weekends – people pay double or triple the regular rate for a room if they want it bad enough. The same approach can be taken for hand sanitizer. 

Are there Penalties for Price Gouging?

When governors across the country issued states of emergency, those statements included requirements to prevent businesses from charging extreme rates for necessities. The executive order that President Trump signed included provisions to avert price gouging and the hoarding of medical supplies on an industrial scale. 

Violating price-gouging policies carries strict penalties. Attorney General William Barr noted in a White House press briefing that this is a felony crime that can carry a one-year prison sentence. He explained, 

“If you have a big supply of toilet paper in your house, this is not something you have to worry about. But if you are sitting on a warehouse with masks, surgical masks, you will be hearing a knock on your door.”

What Solutions Are Recommended to Prevent Price Gouging?

In the letter, the attorneys general said that online retailers need to do more to prevent third-party sellers from dishonest pricing tactics. As a solution, they recommended that online retailers:

  • Create price-gouging policies to be enforced during an emergency 
  • Trigger those price-gouging protections before an emergency begins
  • Establish a complaint portal so consumers can report possible price gouging

Consumers can also report violations of price gouging, bid-rigging, or market allocation schemes to the federal government’s Antitrust Division Citizen Complaint Center.

Schedule a Free Consultation at The Umansky Law Firm

If you’re facing criminal charges in Central Florida, call The Umansky Law Firm for a free legal consultation. Price gouging and hoarding of necessary medical supplies during this coronavirus epidemic can land you with a felony and a lasting criminal record. Whether it’s a misdemeanor or felony charge, any criminal conviction stays on your record and can negatively impact your life for years to come. Fight for your best chance possible for freedom by securing a criminal defense lawyer with experience and knowledge. 

The Umansky Law Firm’s team of criminal defense lawyers use their experience as former Florida prosecutors to aggressively defend you throughout every step of the process so that you get the second chance that you deserve. To schedule a free case review with one of our Florida criminal defense attorneys, complete an online contact form or call today at (407) 890-0336.