AG Nessel Continues Consumer Protection Work

AG Nessel Continues Consumer Protection Work with Price-gouging Enforcement

LANSING – As Michigan’s fight against a deadly pandemic continues, Attorney General Dana Nessel has stayed the course in protecting consumers from businesses and retailers charging excessively high prices for products.

Nessel’s office has taken multiple actions to rein in predatory business practices by both brick-and-mortar establishments and online sellers throughout the coronavirus disease 2019 (COVID-19) pandemic.

“This public emergency is not an excuse to rip people off, and my office will remain vigilant in our efforts to protect consumers from being taken advantage of,” Nessel said. “I am committed to serving the people of Michigan and I will not allow predatory businesses to profit off vulnerable people who are concerned for their well-being and faced with the uncertainty surrounding this crisis.”

Since early March when COVID-19 concerns became present in Michigan, Nessel’s office has received more than 4,200 complaints about businesses and individuals who are price-gouging consumers during this crisis, but some of these complaints do not warrant further investigation and, unfortunately, many do not contain enough information to verify the complaints as legitimate.

Consumers are encouraged to file a complaint online with the Attorney General’s office so that the complaint contains as much information as needed to properly evaluate a response.

Recent actions the Attorney General’s office has taken with respect to price-gouging include:

A.M. Cleaning & Supplies

A.M. Cleaning & Supplies in Ann Arbor has been under investigation by the Attorney General’s office for price-gouging for several weeks, and the business has failed to provide documents requested by investigators. The Attorney General’s office recently filed a motion in Washtenaw County Circuit Court to enforce its civil investigative subpoena, along with a brief in support of that motion. The motion asks the court to order production of the documents, and to impose a $1,000 civil fine for the non-compliance.

The Attorney General’s office has received multiple consumer complaints against A.M. Cleaning that allege the store drastically increased its prices of hand sanitizer. Complaints began after the business posted a message on social media advertising hand sanitizer at $60 for a 12-ounce bottle, $40 for an 8-ounce bottle and $20 for a 4-ounce bottle. Days before, the bottles were reportedly priced at $7.50, $5 and $2.50, respectively.

BioMed 

The Attorney General’s office recently completed an Assurance of Voluntary Compliance (AVC) with BioMed Wellness Center. An AVC is a tool provided for in the Michigan Consumer Protection Act (MCPA) that allows for the resolution of an alleged  violation without litigation.

BioMed was the subject of a cease and desist letter from the Attorney General’s office in early April. The Attorney General was concerned about BioMed’s apparently excessive prices on products like gloves and hand sanitizers in comparison to other companies selling the same or similar products.

Under the AVC, the business agreed to reduce its prices on sanitizers, gloves and face masks. It also is paying the State of Michigan $2,000, most of which is designated for reimbursements to consumers through a claims process to be administered by the Attorney General. Consumers who believe they have paid too much for sanitizer, gloves and face masks from BioMed should save their receipts and file a complaint. They will then be sent a claim form.

Smokehouse Distribution 

The Attorney General’s office sent a cease and desist letter to Smokehouse Distribution, a business located in Commerce Township, which was advertising face masks for sale on a website called BeamerSmoke.

The proprietor advertised the surgical-type masks at two for $18 and admitted to investigators that the masks were purchased for about 56 cents apiece. The proprietor also said the higher price was an error that was addressed as soon as it was discovered. However, the price for two masks then dropped to $12 and $10, still a significant markup.

The owner indicated only 17 sales of face masks occurred through the website, but an invoice provided to the Attorney General’s office shows the business purchased nine cases of 2,000 masks each from a supplier.

The business has 10 days to respond to the Attorney General’s office, otherwise additional action could include the launch of a formal investigation through court subpoenas. The business could also agree to an AVC.