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Attorneys general, including Iowa’s, warn stores, sites to monitor for price gouging

Lee Rood, Des Moines Register
Published 10:49 a.m. CT March 25, 2020 | Updated 6:16 p.m. CT March 25, 2020

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Attorneys general from more than 30 states, including Iowa, sent letters Wednesday to Amazon, Facebook, eBay, Walmart and Craigslist, warning them to more rigorously monitor for price gouging as the coronavirus pandemic drives up demand. 

The letters listed several examples of price-gouging around the country: On Craigslist, a 2-liter bottle of hand sanitizer was being sold for $250; on Facebook Marketplace, an 8-ounce bottle was being sold for $40; and on Ebay, packs of face masks were being sold for $40 and $50. 

“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,” the letters said. 

Iowa Attorney General Tom Miller said it is unconscionable for sellers to raise prices excessively during the pandemic.

“We will pursue anyone who persists in this practice, and that includes individual sellers on social media as well as retailers,” he said.

The move came as formal and informal complaints to Miller’s office about higher prices charged by Iowa retailers, online sites and social media platforms topped 200.

Lynn Hicks, a spokesman for the attorney general, said the most frequent complaints have involved medical masks and respirators, toilet paper or other paper products, hand sanitizer and cleaning products. 

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Businesses or individuals found in violation could face civil penalties of up to $40,000 under the Iowa Consumer Fraud Act. 

Gov. Kim Reynolds’ disaster declaration triggered the state’s price-gouging rule, which forbids excessive prices for goods or services “needed by victims of disasters.” 

That includes water, food, medicines, sanitation supplies, utilities and building materials. An excessive price is one “not justified by the seller’s actual costs of acquiring, producing, selling, transporting, and delivering the actual product sold, plus a reasonable profit.” 

Hicks said investigators are contacting sellers and asking for more information when they see complaints with potential merit.

Staff members are also posting warnings on social media sites where they see what appear to be violations, and in some cases are contacting individual online sellers. 

The office will issue cease-and-desist letters to anyone who is clearly price-gouging and consider further legal action to those that refuse to comply.   

Many of the price hikes, however, do not constitute price-gouging under Iowa law, Hicks said.

“As much as some of us are relying on wine right now, wine is not necessary during a disaster,” he said.

“We’re also having to explain to people if a business is responding to a higher cost from a supplier, then they can charge more and make a reasonable profit,” he added.

The attorneys general recommend several changes to protect consumers from price gouging, telling retailers to establish policies and enforcement even before an emergency is declared and giving consumers a portal to complain.

Consumers should contact the Consumer Protection Division if they have consumer complaints about price gouging at www.iowaattorneygeneral.gov, 515-281-5926 (toll-free number outside of the Des Moines area: 888-777-4590) or consumer@ag.iowa.gov.

Feds monitoring COVID-19-related fraud.

Officials for U.S. attorneys in Iowa’s northern and southern judicial districts say they have designated point people to pursue cases of fraud related to the coronavirus pandemic, but have none to announce as yet.

Rachel Scherle, a spokesperson for the southern district, which includes the Des Moines metro, said the attorney general is concerned about the following schemes that may be related to the COVID-19 pandemic:

  • Individuals and businesses selling fake cures for COVID-19 online.
  • Phishing emails from entities posing as the World Health Organization or the U.S. Centers for Disease Control and Prevention.
  • Malicious websites and apps that appear to share coronavirus-related information to gain and lock access to your devices until payment is received.
  • Fraudulent solicitations for donations to illegitimate or non-existent charitable organizations.
  • Medical providers obtaining patient information for COVID-19 testing and then using that information to fraudulently bill for other tests and procedures.      

Those who suspect COVID-19 fraud are encouraged to call the National Center for Disaster Fraud hotline at 866-720-5721 or use the NCDF email address disaster@leo.gov.

Lee Rood’s Reader’s Watchdog column helps Iowans get answers and accountability from public officials, the justice system, businesses and nonprofits. Reach her at lrood@dmreg.com or 515-284-8549. Follow her on Twitter at @leerood and on Facebook at Facebook.com/readerswatchdog. Our subscribers make the Reader’s Watchdog possible.

Subscribe today at DesMoinesRegister.com/Deal to support her work.

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