May 15th, 2020
Price Gouging in a Pandemic
In what seems like a year ago, West Virginia declared a “State of Preparedness” back on March 4 because of the incoming COVID-19 pandemic. In doing so, it was West Virginia’s first step in utilizing our resources to protect the citizens of our state. Emergency operation plans could be put in place, the West Virginia National Guard could be ready to mobilize appropriate personnel and resources for an imminent emergency and state agencies could be put on alert. A seldom cited protection invoked when a State of Preparedness is declared is that West Virginia’s price gouging laws go into effect.
Without price gouging laws to serve as a backstop during a pandemic -- like the one we are currently facing -- businesses are free to charge any cost customers are willing to bear. As we know, empty shelves followed in the weeks after our state’s original action as the national emergency ensued. Social media exploded with concerns over pricing at local establishments. Pictures were shown of handwritten “prices” popping up for essential items for every household.
The West Virginia Consumer Credit and Protection Act includes price gouging measures to keep merchants from taking advantage of consumers by greatly increasing prices for essential goods or services. The legislature has found that during a declared State of Preparedness or State of Emergency the public interest requires that excessive and unjustified increases in the prices of goods and services be prohibited. The items included range from building materials and emergency supplies to essential consumer items. Protections are also in place for rental housing and the sale of medical supplies.
Prices for goods contained within our price gouging laws may not be increased more than 10 percent above the prices in effect days before the declaration by the state. This means that when West Virginia declared the State of Preparedness on March 4, businesses were capped at consumer price points found just before the announcement. The only time a business may stray from this price cap is if the increase of greater than 10 percent can be directly attributed to additional costs. For example, there could be additional costs to providing the service or an increase in costs imposed by the supplier.
Anyone violating West Virginia price gouging laws is guilty of a misdemeanor and can be subjected to a fine of not more than a thousand dollars and could be incarcerated for not more than one year. The Office of the Attorney General enforces our price gouging laws.
While states are slowly moving to “re-open” in the coming weeks and months, there are no signs the current emergency orders will be expiring anytime soon. Household goods and essential items like masks, which we are advised to wear in public, will certainly be subjected to our price gouging laws going forward. Masks have already been a hot item in our neighboring state of Ohio. Recently the Attorney General of Ohio, Dave Yost, entered a consent decree against eBay seller “Donkey476” who was price gouging N-95 masks at an 1800 percent markup. The eBay seller was forced to refund $15,000 to his buyers, pay the cost of the investigation and donate his remaining masks to Cleveland’s MetroHealth as part of the agreement.
If you suspect price gouging may be taking place, the Consumer Protection Office can be contacted at 1-800-368-8808.