Bill Will Expand AG James’ Ability to Go After Price Gouging Targeting NYS, Hospitals, and Small Businesses

NEW YORK – New York Attorney General Letitia James today applauded the State Senate and Assembly for passing legislation that will substantially strengthen New York State’s price gouging statute to prevent excessive price increases on essential goods and services, as the state continues to battle the coronavirus disease (COVID-19). The bill (S.8189/A.10270) expands protections against price gouging beyond consumer goods to include any products or services that are vital or necessary to the health, safety, and welfare of consumers or the general public. This change will ensure that the law protects a broader scope of products and services — including medical supplies and equipment, such as ventilators — which are critically needed during the current public health crisis. The legislation will also extend protections to small businesses, hospitals and other health care providers, and even the State of New York, as they purchase products or services for the benefit of the public.

“It is vitally important that the state has all the necessary tools to protect New Yorkers against those seeking to take advantage of this pandemic,” said Attorney General James. “This common-sense measure will enable my office to better protect consumers, small businesses, health care providers, and even the state from price gouging. Over the last three months, we have received over 5,500 price gouging complaints related to COVID-19, which is why we are focused on protecting all New Yorkers now and in the future. We look forward to seeing this bill signed into law and continuing our work to protect New Yorkers. I thank Senator Hoylman and Assemblywoman Rozic for their support and partnership in passing this important legislation.”

“Virus profiteers and scam artists tried to rip off New Yorkers, selling medical supplies at sky-high prices to desperate hospitals and local governments,” said Senator Brad Hoylman (SD-27), the bill’s Senate sponsor. “It’s unconscionable that someone would use the COVID-19 crisis as a way to make a quick buck. That’s why I introduced this bill to expand our price gouging statute, protecting more New Yorkers than ever from these rip-off schemes. I’m grateful to Senate Majority Leader Andrea Stewart-Cousins for ensuring we pass this important bill today, to Assembly Member Nily Rozic for her partnership, and to Attorney General Letitia James for her advocacy on behalf of New York’s consumers.”

“The COVID-19 pandemic has exposed flaws in the state price gouging statute and this legislation will go a long way to ensure that New Yorkers have access to the products and care required without paying excessive and unreasonable prices,” said Assemblywoman Nily Rozic (AD-25), the bill’s Assembly sponsor. “While we continue to work to contain the spread of disease, we must protect consumers when they are particularly vulnerable. This legislation would ensure that no one can prey on consumers’ fears and cause widespread panic during a health crisis.”

Since the beginning of the COVID-19 outbreak, consumers, small businesses, health care providers, and the state have all faced steep price increases for critical medical goods and other essential items, such as hand sanitizer, face masks, and disinfectant spray. New York hospitals have paid up to 15-times more than the normal price for gloves and masks, while the state estimates total coronavirus-related expenses will exceed $15 billion due to bidding competitions with other state governments and high prices from suppliers. Under the existing price gouging statute, the Office of the Attorney General (OAG) has been limited in its ability to take action on certain types of items not typically deemed consumer goods such as medical supplies. Today’s legislation will allow the OAG to now take action against those seeking to profit off the health and safety of the general public.

Attorney General James has been focused on protecting consumers and vulnerable communities since the onset of the pandemic. In response to more than 5,500 complaints of excessive prices, the OAG has issued more than 1,500 cease-and-desist orders to businesses that stand accused of violating the current law.

The OAG also today filed a lawsuit against wholesale grocery distributor Quality King Distributors, Inc. for illegally increasing the company’s wholesale prices for the sale of Lysol disinfectant products to neighborhood grocery and discount stores in New York. Since the beginning of the COVID-19 crisis, Quality King allegedly gouged prices of more than 46,000 cans of Lysol, even though the company did not incur increased costs for the products. The stores purchasing Lysol products from Quality King then passed on those increased prices to customers, forcing them to pay far higher prices for Lysol products than they did before the pandemic. Consumers were charged as much as $16.99 for one can of Lysol, which was previously sold at a retail price range of $5.00 to $8.00.