The Division of Consumer Protection (DCP) has learned of instances of price gouging in the personal and household goods market in response to the coronavirus (Covid-19). Price gouging in New York State is illegal. DCP is encouraging all New Yorkers who observe or are a victim of price gouging to report these occasions.
Price gouging occurs when a merchant takes advantage of an abnormal disruption in the marketplace. On January 31, 2020 the U.S. Secretary for Health and Human Services declared a national public health emergency for the 2019 Novel Coronavirus (Covid-19). The declaration of a national emergency triggered New York State price gouging laws, which prohibit selling goods or services to consumers in an affected area for an unconscionably excessive price. (NY General Business Law § 396-r).
While the law specifically states an “unconscionably excessive price” is a question of law for a court to decide, a price is likely to be found “unconscionably excessive” if:
1. The price being charged by the seller during the national emergency event is grossly greater than the price charged immediately prior to the onset of the national emergency event by that same seller.
2. The price being charged during the national emergency event grossly exceeds the price for the same or similar goods and services readily obtainable in the affected area by other consumers.
A: Drug Store X in New York typically offers hand sanitizer in the price range of $3 - $7 a bottle. After the Covid-19 virus is declared a national emergency, Drug Store X, which normally offered hand sanitizer for $3-$7 increased its prices to $9-21 a bottle. A 300% increase in price affords Drug Store X the opportunity of extreme profits under severe circumstances.
B: In January 2020, a local hardware store sold a box of face masks for $15. The United States Secretary of Health and Human services declared a national public health emergency. New York State learns of its first coronavirus patient, and the same box of face masks is now selling for $30 a box, double the price. The big box store 10 miles away continues to offer the box of face masks for $15.
Drug Store X and the local hardware store appear to be engaged in price gouging.
Any New Yorker who sees excessively priced consumer goods and services that are used primarily for personal, family or household purposes to prevent or respond to the Covid-19 virus should file a complaint with the New York State Division of Consumer Protection.
New Yorkers can now report sudden and unexpected increases in consumer goods such as hand sanitizer, cleaning supplies, or other health and sanitation related products by calling the consumer hotline toll free at 800-697-1220. This line is available seven days a week from 8:30 am to 8:30 pm for consumers.
Consumers can also visit the DCP website at www.dos.ny.gov/consumerprotection. Complaints can be filed against vendors, retailers and suppliers doing business in New York State.
Consumer Complaint forms are available for filing 24/7 at: Consumer Complaint Form
When reporting, be prepared to provide details of the alleged price gouging to include the location of the merchant and any available proof of the excessive price(s), such as receipts or pictures.
The Division’s Consumer Assistance Unit will review the complaint and, if appropriate, engage in voluntary mediation on behalf of the consumer or refer the complaint to the Office of the Attorney General to initiate an enforcement action. In either instance, the Division will keep the consumer informed of all actions taken on their behalf.
New Yorkers can call the Novel Coronavirus State hotline at 1-888-364-3065, where experts can answer questions regarding the novel coronavirus. In addition, the Department of Health has a dedicated website which was created as a resource with updated information for New Yorkers. The Department of Health has also launched two public service announcements on the novel coronavirus, one featuring State Health Commissioner Dr. Howard Zucker and another with general information, that are running statewide in multiple languages.