AG Racine Sends Cease-and-Desist Letters to Stop Price Gouging by District Stores and Online Sellers

OAG Found Evidence of Illegal Markup for Disinfecting Products, Gloves, Other Essential Items

WASHINGTON, D.C. – Attorney General Karl A. Racine announced today that the Office of the Attorney General (OAG) sent five cease-and-desist letters to District-area convenience stores, a beauty supply store, and an online seller for credible allegations of price gouging. In response to complaints from District residents, OAG investigators discovered that the local stores had raised prices on disinfecting products and other goods that District residents need to safeguard their health during the COVID-19 pandemic. OAG also found an Amazon online seller based in the District had exorbitantly raised prices on hand sanitizing products.

“District law prohibits price gouging during a state of emergency,” said AG Racine. “D.C. residents who are seeking scarce and essential goods to protect their health should not have to worry about paying illegally inflated prices. Individuals and companies who seek to illegally profit from a public health emergency must stop their unlawful behavior now. The Office of the Attorney General is investigating price gouging complaints, sending cease-and-desist letters and, if necessary, will file suit against individuals or businesses taking advantage of consumers in the District. This is a warning that will be backed up by action.”

The District’s price gouging consumer protection law goes into effect when the Mayor declares a state of emergency, which occurred on March 11. The law prohibits individuals or businesses from charging higher than the normal average retail price for goods and services. Specifically, the law bars retailers from raising costs for services more than 10 percent above the price charged within 90 days before the declaration. For goods and merchandise, the law bars an increase in markup over wholesale costs above the markup percentage in place 90 days before the declaration. The penalty for price gouging in the District is $5,000 per violation. Additionally, OAG can stop wholesalers from unreasonably raising prices on retailers—which in turn forces increased costs on consumers—through enforcement of the Consumer Protection Procedures Act.

Cease-and-Desist Letters
After receiving complaints and conducting investigations, OAG concluded that the following four stores and online seller had violated the District’s prohibition on price gouging.

  • Northwest D.C. convenience stores: One store increased prices on 72-count packs of generic brand disinfecting wipes to $8.99 and 100-count packs of latex gloves to $15.99. Another store raised the price of 16-ounce bottles of rubbing alcohol to $9.99.
     
  • Southeast D.C. convenience store: The store doubled the costs for bottled water and marked up the price for Lysol to $19.99.
     
  • Southeast D.C. beauty supply store: The store raised the price for eight-ounce bottles of hand sanitizer to $15.00, and sold both individual face masks and pairs of latex gloves for $1.99 each—even though a 100-count pack of latex gloves typically sells for under $5.00. 
     
  • Online Amazon Seller: The seller on Amazon raised prices far above the acceptable limit on a number of products. That includes: nearly doubling the cost of dispensing stands for sanitizing wipes, nearly tripling prices on bulk packs of hand sanitizer, and more than quadrupling the cost of touch-free foam hand sanitizer dispensers.

A redacted version of a cease-and-desist letter on price gouging to stores is available at: https://oag.dc.gov/sites/default/files/2020-03/Price-Gouging-Warning-Letter-Convenience-Store-Redacted.pdf

A redacted version of a cease-and-desist letter on price gouging to an online seller is available at: https://oag.dc.gov/sites/default/files/2020-03/Price-Gouging-Warning-Letter-Online-Redacted.pdf

In collaboration with District’s Department of Consumer and Regulatory Affairs, OAG is investigating price gouging complaints submitted by District consumers. Since March 11, OAG has received more than 25 complaints, many of which are grocery stores, pharmacies or convenience stores. When appropriate, OAG will send cease-and-desist letters, file suit to enforce the law, and seek to revoke licenses and permits.

Yesterday, AG Racine joined 33 Attorneys General urging Amazon, Craigslist, eBay, Facebook, and Walmart to ramp up efforts against price gouging on their online platforms.

How to Report Price Gouging
To help OAG investigate price gouging complaints, consumers should attempt to identify the prices of goods and services before the emergency declaration on March 11. If you believe an individual or business is engaging in price gouging, submit a complaint to OAG by:

OAG’s COVID-19 Resources
In response to the Coronavirus (COVID-19) pandemic, the Office of the Attorney General (OAG) is teleworking until at least April 27. You can access OAG services online and over the phone during our telework period at:

Know Your Rights: Read OAG’s Consumer Alert to protect yourself from scams, price gouging, discrimination, and to get information about consumer, worker, and tenant rights during the pandemic. This alert is also available in Amharic, Chinese, French, Korean, Spanish and Vietnamese.

Get the latest OAG updates by signing up for our newsletter: www.oag.dc.gov/newsletter

For more District Government updates and how you can prevent the spread of germs visit: coronavirus.dc.gov

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