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Attorney General, Division of Consumer Affairs Work to Fight COVID-19-related Price Gouging, Warn of Scams

As reported on last week, Attorney General Gurbir S. Grewal and the New Jersey Division of Consumer Affairs (DCA) are working to protect consumers from price gouging or other consumer protection violations related to the COVID-19 pandemic.

Grewal reported as of March 18, DCA has sent or is sending more than 80 cease and desist and warning letters to businesses the division has received complaints of price gouging or other consumer protection violations related to the COVID-19 pandemic.

“It’s times like these when the work of the Division of Consumer Affairs is most critical,” said Grewal. “People are looking to us for guidance and for protection, and it’s our job to be there for them in every way we can.”

In addition to dedicating available resources to investigating complaints related to COVID-19, DCA is informing consumers about scam artists seeking to take advantage of consumers’ concerns about coronavirus.

“Whether it’s protecting consumers from merchants who seek to prey on them financially or providing information and guidance to the licensed professionals they rely on for health care, we’re looking out for them,” said Paul R. Rodríguez, Acting Director of the Division of Consumer Affairs.

Rising Number of Complaints

Complaints received from consumers allege retailers are unfairly raising prices on surgical masks, hand sanitizers, disinfectant sprays and wipes, food, bottled water and other protection-related items.

As of March 12, DCA had received 270 complaints related to alleged COVID-19 price gouging or other consumer protection violations. By March 17, that number jumped to 619.  Nearly all of the complaints were received since March 4.

The 619 complaints relate to a much smaller number of identifiable businesses, as some businesses have generated multiple complaints and some complaints have not included enough information to identify the business at issue.

Enforcement Efforts Against Price Gouging

DCA stated that it sent approximately 82 cease-and-desist or warning letters to businesses about which it has received complaints and has completed at least 159 inspections, and issued 13 subpoenas for additional information.

In addition to investigating potential violations of the Consumer Fraud Act, DCA is investigating potential price gouging. Gov. Phil Murphy triggered the state’s price gouging law on March 9, by declaring a state of emergency in response to the COVID-19 outbreak.

New Jersey’s price gouging law prohibits excessive price increases during a declared state of emergency and for 30 days after its termination. A price increase is considered excessive if the new price is more than 10% higher than the price charged prior to the state of emergency.

Price gouging violations are punishable by civil penalties of up to $10,000 for the first violation and $20,000 for the second and subsequent violations.

Expanded Investigative Resources

DCA’s efforts have been bolstered by the participation of investigators from across the DCA, including from its Professional Boards Enforcement Bureau, Office of Weights & Measures, and Bureau of Securities to assist investigators from the Office of Consumer Protection (OCP).

Both Grewal and Rodríguez kicked off the training for these investigators by emphasizing the importance of combatting price gouging and other consumer abuses at a time when it’s necessary for the country to come together as one.

Following the training session, dozens of OCP and redeployed investigators hit the streets to begin inspecting stores in response to consumer complaints.

Be Aware of Scams

In addition to fighting back against price gougers, the DCA reminds consumers to be aware of a number of apparent scams related to COVID-19. To avoid this and some of the tactics being reported as possible scams, here are some recommendations:

  • Don’t let Centers for Disease Control and Prevention (CDC) imposters into your home. Representatives from the CDC are not going door-to-door seeking information or conducting surveillance on COVID-19. Imposters should be reported to local authorities and DCA.
  • Don’t fall for fake cures. Beware of in-store or online advertisements for products that claim to cure or prevent COVID-19 or other similar offers. No cure or preventative medicine has been approved for sale.
  • Look out for phishing emails. Cybercriminals may take advantage of global concern and interest in COVID-19 to try to convince email recipients to open links or attachments that may direct them to malicious websites or deliver malware. Stay away from COVID-19 related information that does not come from a trusted source, to avoid exposing your personal information.
  • Keep in mind not everything online may be factual. The internet is full of information, but be mindful of its accuracy. As false reports spread regarding the origination and spread of COVID-19, rely only on trusted sources for information.
  • Be wary of unsolicited calls. Whether they are offering health insurance, including to supplement Medicare or Medicaid benefits, or a cure or treatment for COVID-19, refrain from sharing your personal information over the phone, unless you have initiated the call.
  • Avoid internet adoption scams. Scammers are falsely misrepresenting themselves as CDC employees, and asking victims to send money overseas to adopt a pet being held at a quarantine station. The CDC does not quarantine pets or would not ask for payment to bring an animal into the U.S.

Reporting Violations

If you believe price gouging is occurring, contact the Division of Consumer Affairs at (973) 504-6240. A special voicemail box has been set up to address COVID-19 related price gouging complaints and will be checked regularly, even outside of normal business hours.

Please leave your name, contact information, nature of the complaint, and the name and location of the business. Consumers should note the price of a good or service being sold, as well as the price prior to the declared State of Emergency, if known.

Consumers are also encouraged to file complaints online by visiting the Division’s website.

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