Attorney general steps up enforcement against price gouging during COVID-19 crisis

The New Jersey Division of Consumer Affairs and New Jersey Attorney General’s office have taken more than 200 actions this week to stop unscrupulous retailers from jacking up prices on those essential items, officials said. 

Over the past seven days, the Division of Consumer Affairs has sent 217 cease and desist letters to merchants statewide and served an additional three subpoenas seeking information regarding alleged price gouging.

To date, the Division of Consumer Affairs has issued 731 cease-and-desist letters and approximately 92 subpoenas to retailers across the state warning them that New Jersey’s Consumer Fraud Act protects consumers from gross and unreasonable inflation of the price of any product during a state of emergency. 

“Price gouging is against the law and intolerable at a time people are doing their best to stay safe during this pandemic,” Grewal said. “We want to reassure New Jersey residents that we remain committed to take action against opportunists attempting to profit off the demand for essential items.” 

Paul Rodríguez, acting director of the Division of Consumer Affairs, said the agency will aggressively enforce New Jersey’s consumer protection laws during the state of emergency.

“We encourage consumers to remain vigilant and report price gouging and other attempts to take advantage of consumers using our online complaint form, where you can submit photos and screenshots of suspect activity,” Rodriguez said.

The Division of Consumer Affairs has logged a total of 3,623 complaints related to the COVID-19 emergency against about 2,100 business locations. About 90 percent of the complaints allege unfair price increases on personal protective equipment, sanitizers, disinfectants, food, bottled water, and other items in demand by consumers concerned about keeping safe during the COVID-19 crisis and having enough food and supplies.

Cease-and-desist letters and subpoenas have been issued to retailers across the state suspected of significantly inflating prices of items. Examples of price hikes reported to the division as potential violations: A convenience store allegedly is charging $6 for a single roll of paper towels; a janitorial supply store allegedly is charging $20 for a can of Lysol; a convenience store allegedly raised the price of 2-ounce pocket bottles of hand sanitizer to $4.99 from its $1 pre-emergency declaration price, an almost 500% increase; a grocery store allegedly is charging $12 for a gallon of milk; a deli allegedly is charging $10 for a gallon of water; a convenience store allegedly is charging $60 for a small package of toilet paper; a dollar store allegedly is charging $9.99 for a gallon of bleach; a gas station allegedly is selling single–use masks for $25 each; and a supply store allegedly is charging $36 for a gallon of hand sanitizer.

The Division of Consumer Affairs is also reviewing reports of businesses selling homemade hand sanitizers and items not meant for individual sale such as wipes and certain masks. Consumers are urged to beware of poorly labeled merchandise.

Officials have also received reports about companies and individuals claiming to offer COVID-19 home test kits for sale and falsely marketing products as effective in preventing the spread of COVID-19, or overstating the effectiveness of their products. Consumers should be skeptical of sellers of such home test kits and products. 

New Jersey’s price-gouging law, which took effect on March 9 after Governor Phil Murphy’s declaration of a state of emergency, prohibits excessive price increases during a declared state of emergency and for 30 days after the emergency is over. 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 just prior to the state of emergency, and the increased price is not attributable to additional costs imposed by the seller’s supplier or additional costs of providing the product or service during the state of emergency. Price-gouging and other consumer fraud 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 will be subject to injunctive relief. Each sale of merchandise is considered a separate violation. 

Consumers who suspect consumer fraud, violations, or believe that businesses have unfairly increased their prices in response to COVID-19 are encouraged to file complaints online to report specific details investigators can follow up on. Photographs of items being sold, receipts, and pricing can now be uploaded to the state’s new price gouging complaint form.