Fri, 29 May 2020

Experts Warn of New Round of Price Gouging for Masks

Voice of America
03 Apr 2020, 09:35 GMT+10

Examples of price gouging in the age of the coronavirus have been shocking: $459 for a 50-milliliter bottle of hand sanitizer. Over $500 for a thermometer. More than $200 for a box of 10 face masks.

The coronavirus outbreak fueled widespread rip-offs in February and March, boosting the prices of public health products such as surgical masks by as much as tenfold.

But that was when U.S. Surgeon General Jerome Adams was urging Americans not to buy face masks because, he said, they were not effective in preventing the general public from catching the virus and were needed more by public health care professionals.

Now, with U.S. health authorities reportedly considering advising people to cover their faces to protect others and keep them from spreading the virus, demand for masks is likely to grow, unleashing a new wave of price gouging, experts warn.

More production vital

Carmen Balber, executive director of Consumer Watchdog, warned that without a ramp-up in mask production, "we'll all be scrambling, searching for nonexistent sellers online."

Masks are already incredibly hard to come by. Pharmacy chains such as CVS have stopped carrying them. Mom-and-pop stores are out. On Amazon, consumers have to wait a couple of months to receive delivery if they want to avoid astronomical prices.

So where does one go to buy a mask now?

"I, unfortunately, can't give you a recommendation as to where a consumer is definitely going to be able to find a mask these days," Balber said.

The scarcity is not limited to consumers. Front-line doctors and nurses seeking to protect themselves from the virus face critical shortages of their own, even as major U.S. manufacturers boost production.

Prices of surgical masks and respirators began skyrocketing amid panic buying and widespread hoarding, experts say. In response, online marketplaces such as Amazon and eBay have removed hundreds of thousands of listings while federal and state authorities have been cracking down on price gouging and hoarding.

Barr's warning

"If you're sitting on a warehouse with masks, surgical masks, you'll be hearing a knock on your door," Attorney General William Barr said at a White House press briefing on March 23.

The warning appears to have had a degree of effect. One no longer sees 10-packs of masks going for $200 each on Amazon, as they did before.

But law enforcement officials remain on guard. With most U.S. states prohibiting price gouging, state attorneys general have in recent weeks issued cease-and-desist letters, imposed fines and brought lawsuits against suspected price gougers.

On March 26, Texas Attorney General Ken Paxton sued Auctions Unlimited for price gouging after the auctioneer listed more than 750,000 masks for auction, allowing bidding to rise as high as $180 for a pack of 16 masks - or $11.25 per mask.

"My office will not tolerate anyone taking advantage of Texans in need and profiting from this health crisis," Paxton said in a statement.

On March 27, Michigan Attorney General Dana Nessel sent a cease-and-desist letter to a medical supply provider for selling N95 respirators for $99.95 for a box of 10 when it should go for $15.

With health care providers in urgent need of protective masks, manufacturers and others have been directing supplies and donations to hospitals. Amazon says it has restricted purchase of N95 respirators to hospitals and government agencies.

'Severe' gouging

All of this means ordinary people must pay handsomely if they can locate masks to purchase. A recent analysis by the advocacy group U.S. PIRG found "severe price gouging" on Amazon. Surgical mask prices were 166% higher on February 27 than their 90-day average, the study found.

Amazon's fair-pricing policy prohibits sellers from charging "significantly higher" than recent prices offered on or off Amazon.

Grace Brombach of U.S. PIRG said Amazon and other online retailers haven't been proactive enough in combating price gouging. Only when they receive reports of price gouging do they remove the "Buy Now" button or take down a listing.

"Many online retailers are playing a game of whack-a-mole," Brombach said. "But what they really need to be doing is implementing systems that are proactive to prevent these overpriced items from reaching the marketplace in the first place."

U.S. PIRG recommends that retailers such as Amazon set "hard limits on price increases compared to a rolling average of the previous 60 days."

Amazon did not immediately respond to a request for comment.

In a statement, eBay said it has "been taking action to stop the inflated price of related listings on the site."

Last month, eBay announced a ban on health care masks, hand sanitizer and disinfecting wipes.

Spokeswoman Ashley Settle, when told by VOA about several new mask listings on the site Thursday, said those would be taken down. To date, eBay has removed 5 million listings, Settle said.

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