$10 toilet paper? Coronavirus gouging complaints surge in US

ByReese Dunklin and Justin Pritchard AP logo
Thursday, March 19, 2020
Coronavirus News: Price gouging accusations amid sanitizer shortage
Some sellers on Amazon accused of exploiting fears about the novel coronavirus by dramatically increasing prices.

One store advertised hand sanitizer at $60 a bottle. Another was accused of hawking it at $1 a squirt. Chain stores were accused of selling $26 thermometers and face masks at the "everyday low price" of $39.95 a pair, while a convenience store offered toilet paper at $10 a roll next to a sign reading: "This is not a joke."

Across a country where lines are long, some shelves are empty and patience thin, authorities are receiving a surge of reports about people trying to cash in on the coronavirus crisis with outrageous prices, phony cures and other scams. An Associated Press survey of state attorneys general or consumer protection agencies across the country found the number exceeded 5,000, with hundreds more coming in every day.

"Greed is a powerful motivator for some people," said Josh Stein, the attorney general of North Carolina, where the number of reports jumped from 72 to 131 in a day. "It is inexcusable to prey on people in a vulnerable time to make a quick buck."

AP's survey is the most comprehensive look so far at the emerging problem. In all, 40 states responded with numbers that included both tips and formally filed complaints against everything from individuals and mom-and-pop stores to big-box retailers. The count is certainly low because it only includes cases in which someone went online or called to register a grievance.

Many others merely went to the court of social media to vent their outrage.

"STOP SHOPPING HERE!!" one woman blared on Facebook next to cellphone photos of a Southern California grocery charging $6.98 for a gallon of milk and $14.99 for cheddar cheese. "There are families out there who really need groceries and they're overcharging."

Beyond AP's state count, efforts to prevent exploitation are also being carried out by individual cities, such as New York, which alone has received more than 1,000 complaints, issued 550 violations and imposed $275,000 in fines for gouging, including one case in which a store was accused of selling bottles of Purell at $79 each. Among the items the city is preventing stores from jacking up the prices on: aloe vera and rubbing alcohol, the ingredients that can be combined to make hand sanitizer.

States are still checking out many of the claims. While some have gone to court against sellers, others have determined cases didn't meet their legal standard for price-gouging, which generally involves an increase of more than 10 percent. About 10 states have no such law.

States typically try to resolve reports not by pursuing fines or criminal charges but by confronting the retailer, which typically apologizes and lowers the price.

In Maine, investigators had photographic evidence from a shopper to back up the convenience store sale of the $10 rolls of toilet paper. In Tennessee, where state lawyers forced two brothers to stop selling the more than 17,000 bottles of hand sanitizer they had hoarded, investigators checked out a tip that a store was charging $1 for a squirt of sanitizer.

There were reports of overpriced rice in Wisconsin and potatoes in Idaho. In Connecticut, a seller was reportedly hawking medical masks at more than 10 times the normal value. One couple in Ohio reported that a thermometer they bought for $8 at a national chain store cost $26 two days later.

"This is so wrong at a time of crisis," the wife wrote in her report about the thermometer. "Contact them and tell them they can't do this."

Some rural states reported no complaints. A small slice of reports involved not high prices but false claims that products or services can test for or even cure the virus, which in most people causes only mild or moderate symptoms but can be deadly for some. The U.S. Food and Drug Administration has approved no treatments or vaccines, and the National Institutes of Health says no scientific evidence exists to suggest alternative remedies can prevent or cure the illness.

That hasn't stopped the likes of televangelist Jim Bakker pushing treatments with tiny silver particles and conspiracy theorist and Infowars host Alex Jones advertising toothpastes, creams and other products on his radio show. Both were targets last week of cease-and-desist letters from New York's attorney general, and the federal government has sent warning letters to seven companies over false claims.

Pennsylvania, which with more than 1,200 reports had the most in the nation, created an email address dedicated to complaints. Oregon launched a price-gouging hotline this week. Oklahoma's attorney general is shifting agents to its consumer protection unit.

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In Michigan, where reports spiked from 363 on Tuesday morning to 572 by Wednesday afternoon, Attorney General Dana Nessel's office issued cease-and-desist letters instructing businesses and online sellers to correct their pricing or risk further action.

One went to an Ann Arbor cleaning store that used its Twitter account to advertise Purell at prices that soared from $7.50 for one large bottle to $60 in mere days. After customer backlash, the retailer called the tweeted advertisement a "false post" and lowered the prices.

Another warning letter went to the home improvement chain Menards. Some of its stores doubled the price of a gallon of Clorox bleach to $8.99 and offered two types of 3M respirator masks for an "everyday low price" of $39.95 a pair - more than four times what Home Depot advertised.

"I'm very disappointed with Menards' choice of actions during this uneasy time," one man who believed he was overcharged for bleach wrote in an affidavit.

Menards spokesman Jeff Abbott said in a statement that the Wisconsin-based chain considered the Clorox price reasonable because the product had a higher bleach concentration that would last customers twice as long. The statement didn't address the respirator masks.

"We are disappointed and are taking this very seriously," Abbott said.

Authorities in states including Florida were forwarding to the nation's online retail giants - including Amazon, Walmart and eBay - reports that third-party sellers on their sites were overcharging.

In a statement, Walmart spokesman Kevin Gardner said the company is "taking a firm stance" against possible price-gouging on its Marketplace site. Walmart's policy calls for removing listings that are unfairly priced.

On Wednesday, a bipartisan group of House lawmakers urged the Justice Department - which has so far focused on false claims rather than high prices - to police price gouging so that people "have access to the items they need to protect themselves, their families, and their communities."

In an AP interview this week, Attorney General William Barr pledged that the Justice Department would "come down hard" on profiteers so they are not "taking advantage to further hurt the American people."