Utah officials target sellers for price gouging masks, water, Nintendos and more
(Rick Bowmer | AP) A Utahn wears a mask to protect against COVID-19 as he displays the toilet paper he purchased at a grocery store Tuesday, March 17, 2020, in Salt Lake City. The Utah Department of Consumer Protection has fielded several complaints about high costs for toilet paper as the pandemic wears on.
Five dozen eggs for $17. Eight bottles of hand sanitizer for $10 a piece. A single N95 face mask for $15.
And overpriced toilet paper — so much overpriced toilet paper — advertised anywhere from $10 for a single roll to $150 for a case.
Those are just a few of the instances of alleged price gouging Utahns have reported to the state during the coronavirus pandemic
The Utah Division of Consumer Protection
had, as of earlier this month, fielded at least 708 complaints of overpriced goods — and that’s without widespread knowledge that price gouging is illegal in the state during an emergency, said state Rep. Patrice Arent, D-Millcreek.
“It’s amazing how many people don’t know there’s a law and don’t know what to do about it,” said Arent, who sponsored an anti-price-gouging bill in 2005, when she was in the Senate.
[Read complete coronavirus coverage here.]
The Salt Lake Tribune reviewed a sampling of complaints obtained through a records request, some of which include receipts and photo evidence. They allege higher-than-normal prices for everything from medical goods and grocery staples to gaming systems and bottled water.
One Utahn who took a complaint about the high price for a 24-pack of toilet paper directly to a store employee allegedly was met with a shrug.
“Supply and demand, so the price is higher,” the employee said, according to the buyer’s complaint.
While the division has received hundreds of complaints — 290 against an individual and 418 against a business or person selling on behalf of a business — that doesn’t necessarily mean each one represents a unique case of price gouging. More than 80 of the emails to the department were about a single online seller in West Jordan, who appeared to be offering toilet paper for $150 a package on Facebook.
“After investigation, the division determined that the post was a hoax, intended as a joke by the person posting it,” said Brian Maxwell, a spokesman with the Department of Commerce
. The person who made the post received death threats, he noted, and ultimately removed it.
As in that case, not all of the complaints that come into the division actually point at illegal gouging. The price gouging law applies only to goods or services that are deemed “necessary for consumption or use as a direct result of events giving rise to a state of emergency.”
The statue doesn’t define what is “necessary,” so it’s up to a judge to decide — though a complaint for an overpriced N95 mask would probably be more relevant during a pandemic than the one for a pricey Nintendo Switch, which the complainant said was, at $640, “more than double” what it would sell for in most retail outlets.
“The Switch is unfindable in a store right now because of this virus,” the emailer said of the popular gaming system. “I wanted to get one since all my kids are now isolated and have nothing to do.”
As Consumer Protection considers complaints to determine whether a company or individual has violated the statute, it can’t look solely at a listed price, Maxwell said. Instead, investigators find baseline costs to compare the price to — including whether the seller sold the good or service in the 30 days before the emergency and at what cost and whether there were wholesale price increases in the cost of obtaining the good or providing the service.
The division has filed one citation for price gouging so far, against an Ogden resident who was selling N95 masks at a price of $20 each.
The seller has refused to cooperate with investigators, according to the citation, and would not provide information about his costs to obtain the masks. Without that substantiation, the division is alleging that the man charged a price more than 30% higher than the total cost of obtaining the masks, which would constitute an “excessive price” under the statute.
The man, who was charged as an individual and appears to have been acting as an online seller, now faces a maximum potential fine of up to $1,000 per violation capped at $10,000 a day.
Though Utah’s price gouging statute has been on the books for 15 years, that case will be the first test of the price gouging statute, which Maxwell said has never before been used.
He said the office has been scrambling to respond to the high volume of complaints and has had “to use some resources from other parts of the department for investigations.“
“It’s a new world,” he said.
As investigators navigate the statute for the first time, Consumer Protection has identified some needed tweaks, Arent said. After all, a lot has changed in the marketplace over the past decade — primarily with the widespread use of the internet to buy and sell goods and services.
She plans to run some amendments in one of a series of special sessions that legislators will convene to respond to COVID-19 and its aftermath. The changes she’s considering would explicitly state that the statute applies to online sellers and clarify the goods and services that may be covered by the statute. And she wants to make it clear that an advertisement for an offer — even without a sale — would violate the law.
The division currently interprets the price gouging law as applying equally to traditional retailers and individuals selling goods online to consumers, Maxwell noted, but Arent said her amendments would make sure there was no question.
A breakdown of complaints provided by the Division of Consumer Protection shows that the majority were about offers posted online on a classified marketplace or other online platform, like KSL Classifieds or Facebook Marketplace. Just over 250 of the complaints were against brick-and-mortar stores and another 70 were about offers a retailer posted on its own website.
Maxwell said it’s possible that the higher number of complaints in the online marketplace could reflect a misunderstanding among Utahns that the statute could apply to them as individuals.
While Arent said that she hoped never to see the price gouging statute used, she said she’s grateful the state had the foresight to prohibit it all those years ago.
“I’m glad that there is this protection in the Utah code ... for the residents that are seeing the problem,” she said, noting that she’s been fielding calls with complaints about everything from diapers and baby wipes to rice and meat. “I’m glad this is on the books.”
Arent urged Utahns to report instances of price gouging to the division by email at email@example.com
. Consumers are asked to include the date and approximate time of the incident, any known information about the seller and any other evidence they can provide.