Price gouging: Businesses, scammers both targeted consumers during COVIDJuly 30, 2021
American families know well the pain of school and business closures, remote work, layoffs and travel restrictions that resulted from COVID-19. But the pandemic also brought families a slew of challenges in the form of fraud, price-gouging, canceled prepaid events like vacations, changing refund policies, undelivered services and improbable cures.
Pandemic-related problems were among the “worst, fastest-growing and new” complaints compiled by the Consumer Federation of America in its 2020 survey, which included 34 city, county and state consumer agencies from 18 states. The report was unveiled Monday during a news conference in Washington, D.C.
“Business closings, job layoffs, supply chain disruptions, social distancing requirements, and travel restrictions put huge strain on consumers and businesses, generating complaints about everything from appliance repairs to child care, trash pickup to towing,” said Susan Grant, the federation’s director of consumer protection and privacy. “State and local consumer agencies also dealt with a deluge of complaints last year about price-gouging and COVID-related scams.”
The Los Angeles County Attorney’s Office and the county’s Department of Consumer and Business Affairs went after one company, Insan Healing, for reportedly selling radish paste as protection against the novel coronavirus, said Rafael Carbajal, department director. In April, they rolled out a mobile app so consumers can report price gouging as they encounter it, providing photos, receipts and other evidence. That’s led to thousands of reports. He noted recovery of more than $10 million for consumers.
The Arkansas Attorney General’s Office got a company to replace an HVAC unit that failed under warranty during the pandemic — something the consumer had been unable to do alone.
And North Carolina authorities successfully sued — and barred the price-gouging practices — of a company that offered N95 masks to health care providers and first responders at a massive markup. The practice drew a whopping 2,300 complaints filed with the North Carolina Attorney General’s Office.
They also learned some child care providers insisted on being paid during the pandemic when the service wasn’t available. The providers said the money would “hold the child’s spot” for when child care reopened.
The complaints report said “COVID-19 surcharges” started popping up in restaurants and dentist offices, among other places. “While businesses may have incurred additional expenses to take safety precautions in public health emergencies, these surcharges ran afoul of existing laws or government edicts,” the federation noted.
But the results were mixed as local consumer protection agencies and officials tried to help consumers get refunds for weddings that were canceled and dresses for proms that never took place, Grant said, noting some practices are sketchy but not illegal and the fine print people often overlook can…