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NJ attorney general calls on online shopping sites to do more to crack down on price gouging during coronavirus pandemic

New Jersey Attorney General Gurbir Grewal joined with officials in 32 other states Wednesday to call on some of the nation’s largest online marketplaces to adopt more effective measures to combat price increases during emergencies like the coronavirus pandemic. 

In letters to Facebook, Amazon, Walmart, eBay, and Craigslist, the top law enforcement officials from across the country said it is important that unscrupulous sellers do not take advantage of Americans by selling products at unconscionable prices during the unprecedented public health crisis.

The companies receiving the letters have already taken various steps to address price gouging on their online marketplaces, but unconscionably high prices persist. Officials say the companies should do more to protect consumers during emergencies.

“Stay-at-home and social-distancing policies are leading more and more consumers to shop online,” Attorney General Gubir Grewal said. “It is essential that online marketplaces that are benefiting from this public health crisis—while our residents and the brick-and-mortar stores in our communities struggle—do everything they can to prevent sellers from preying on consumers by charging inflated prices.” 

The letter urges online marketplace operators to “prevent unconscionable price increases from occurring in the first place” by blocking third-party sellers from significantly increasing prices above those they were charging before an emergency. Currently, online marketplaces allow sellers to increase their prices and only remove products from the marketplace in response to complaints about price increases. 

The companies are also being urged to adopt controls so that they can stop price hikes even before any government authority declares a state of emergency. Each company has been urged to create a “fair pricing” page or portal where consumers can report price-gouging incidents to the companies directly.  

The New Jersey Division of Consumer Affairs continues to investigate allegations of price gouging. Officials said that by Monday afternoon, the division had received about 1,500 consumer complaints about approximately 1,000 businesses. The complaints allege unfair price hikes on surgical masks, hand sanitizer, disinfectant sprays and wipes, food, bottled water, and other items – some of which were being offered for sale in online marketplaces that received the letter. 

Division of Consumer Affairs investigators have conducted about 300 inspections to date, with county consumer protection offices around the state conducting at least 75 more. The division has issued 167 cease-and-desist letters, instructing businesses to cease any unlawful pricing, and has served 32 subpoenas. 

“In New Jersey, charging exorbitant prices for essential items during a declared state of emergency is not only unconscionable, it’s illegal,” said Paul Rodríguez, acting director of the Division of Consumer Affairs. “Whether you operate a major online marketplace or run a corner store, we expect you to obey the laws in place to ensure that all New Jersey residents have access to critical supplies during this nationwide health crisis.” 

The letters to online marketplace operators highlight some of the COVID-19-related price hikes that have been documented as the virus has spread, including: a 50-percent increase in the price of hand sanitizer and facemasks on Amazon; the sale on Facebook Marketplace of an eight-ounce bottle of Purell Advanced hand sanitizer for $40; the sale on Craigslist of a two-liter bottle of Purell Advanced for $250 (or 10 times the normal price); and the sale on eBay of packs of face masks for $40 and $50. The letters acknowledge that many over-priced items have been removed, and that the companies have taken other steps to address price gouging, but also note that officials continue to receive daily complaints about online prices. 

New Jersey consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an online complaint with the New Jersey Division of Consumer Affairs on the agency’s website.