Mayor Bill de Blasio and Department of Consumer and Worker Protection (DCWP) Commissioner Lorelei Salas today announced the Department filed a case against Metro Drugs (931 Lexington Avenue).
The case was filed for knowingly increasing the price of face masks in violation of DCWP’s price gouging regulations under the City’s Consumer Protection Law. DCWP inspected Metro Drugs twice and both times the pharmacy was selling face masks at drastically increased prices—as high as $200 for 20 masks. In total, DCWP received 23 complaints about Metro Drugs and issued them 75 violations for price gouging of face masks. The case will be heard at the City’s Office of Administrative Trials and Hearings (OATH) where DCWP is seeking up to $37,500 in fines. This is the first of several cases that DCWP will be filing against repeat offenders of its price gouging regulations.
“We have zero tolerance for this behavior in New York City,” said Mayor Bill de Blasio. “Any company who tries to take advantage of New Yorkers during this crisis will have their feet held to the fire. My message: just don’t do it.”
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“We will prosecute businesses using this public health crisis to take advantage of New Yorkers who are concerned for their health and we urge consumers to file a complaint if they are overcharged,” said DCWP Commissioner Lorelei Salas. “To the business community, if you incurred additional costs to supply these items, we will take that into account but what we cannot tolerate is businesses that are knowingly preying on vulnerable consumers for a profit. Do the right thing. Don’t overcharge.”
DCWP is actively inspecting stores based on consumer complaints. Businesses found to be overcharging consumers 10 percent or more for any personal or household good or service that is needed to prevent or limit the spread of or treat COVID-19 will be issued a violation. Examples of covered products include disinfectants, soap, and cleaning products, diagnostic products and services, medicines, and tissues. Since March 5, DCWP has received more than 4000 complaints and issued more than 1000 violations for price gouging. DCWP encourages consumers who are overcharged to file a complaint at nyc.gov/dcwp or by contacting 311 and saying “overcharge.” Consumers who believe they were victimized by price gouging should keep their receipts and any information about the store where the transaction occurred, and file a complaint with DCWP. If the price gouging occurred while DCWP’s regulations were in effect, DCWP can still prosecute the illegal activity.
On March 5, the Commissioner declared face masks in short supply and that declaration was extended with the addition of hand sanitizer and disinfectant wipes on March 10. The declarations were made under the Rules of the City of New York (6 RCNY 5-38), which allows the commissioner to declare certain items temporarily in short supply for 30 days during extraordinary circumstances. On March 16, the Agency promulgated an emergency Rule under the City’s Consumer Protection Law that makes price gouging illegal for any personal or household good or any service that is needed to prevent or limit the spread of or treat new coronavirus (COVID-19). The Rule (NYC Administrative Code 20-701(b)) makes it illegal to increase prices by 10 percent or more during a 60 day period. The Rule can be extended once for an additional 60 days. The Rule covers any personal or household good or service—such as disinfectants, soap, and cleaning products, diagnostic products and services, medicines, and tissues—that is needed to prevent or limit the spread of or treat COVID-19. The fine for price gouging is up to $500 per item or service. If businesses are paying more to obtain these items themselves, they must provide proof to DCWP and any increase must be comparable. If a business paid $2 more per item, they cannot charge customers $50 more.