Hillsdale Resident Issued Michigan’s First Coronavirus Price Gouging C&D

by Josh Colletta

Michigan Attorney General Dana Nessel has issued her first cease and desist notices over price gouging during the novel coronavirus crisis, and the first recipient is an unnamed Hillsdale resident.

According to a press release issued early Wednesday evening, the attorney general’s office had received 572 price gouging complaints as of 11 PM Tuesday. The office’s Consumer Protection Team has been gathering complaints online and over the phone as the state attempts to stop individuals and businesses from taking advantage of the pandemic.

The Hillsdale resident is accused of selling face masks on eBay at substantially marked-up prices.

Additional notices of intended action were sent to the Menards corporate office and A.M. Cleaning and Supplies — both also accused of price gouging.

The A.G.’s office also contacted several other business owners seeking more information on their pricing practices, which they will be required to provide if they wish to avoid further investigation or legal action.

In the press release, Nessel said, “Our primary focus is consumer protection and ensuring that Michiganders have access to the goods they need at reasonable prices. We are not looking to shut down companies or financially jeopardize any business owner with fines, but when proprietors are not following the laws, we will take swift legal action to protect the pocketbooks of residents in this state. I can assure you that anyone trying to illegally profit off this public health emergency will be held accountable.”

The release reiterates that while an injunction to shut down a store is possible under the Consumer Protection Act, that is not the focus of the Attorney General’s office. Instead, the release says the focus is to ensure consumers have access to goods at prices that make sense, and not prices rooted in an effort to exploit during a public emergency.

But it also goes on to say that the Attorney General’s office will seek injunctions when individuals are attempting to run their own stores by purchasing products from another retailer and selling them out of the trunks of their cars, for example.

Some of the other products mentioned in the complaints include toilet paper, bottled water, meat, milk and cleaning products like hand sanitizer, disinfectant wipes, rubber gloves, bleach, etc. More recent complaints have included reports of businesses breaking up bulk packages of products and selling items individually, and stores selling products they don’t generally offer – all at reportedly high prices. Some products that were allegedly being resold at marked-up prices still had sticker tags or labels from the business where it was originally offered.

Gov. Gretchen Whitmer issued an executive order Sunday to specifically address price-gouging related to COVID-19. That order, in part, states no business or person can sell products grossly in excess of the purchase price at which they bought the product. It also says products cannot be sold or offered at a price that’s more than 20 percent higher than what it was listed as of March 9, 2020 – unless the seller can justify the higher price due to an increase in the cost of bringing the product to market.

Meanwhile, legislation introduced in the Michigan Senate would create additional tools for investigators to rein in price-gouging. The bipartisan bills would add price-gouging protections during an emergency declaration or market disruption. Nessel recently stated her support for the legislation.

Michigan residents are urged to report any violation of the Consumer Protection Act online or by calling (877) 765-8388.