State AGs Crack Down on Coronavirus Scams

Emergency declarations have activated state price-gouging laws.

by Elaine S. Povich, Stateline / March 16, 2020

From disgraced televangelist Jim Bakker in Missouri to a convenience store operator in New Jersey, suspected fraudsters are trying to take advantage of the coronavirus panic to trick consumers into buying useless or harmful products, triggering state anti-gouging laws and anti-fraud efforts by state attorneys general.

“When people are desperate and afraid, they are more likely to make a bad financial decision,” Democratic North Carolina Attorney General Josh Stein, co-chairman of the National Association of Attorneys General Consumer Protection Committee, said in an interview with Stateline.
 
His advice to consumers? “Don’t fall for miracle cures.” No cure or vaccine yet exists for coronavirus, according to the U.S. Centers for Disease Control and Prevention.
 
Bakker, who operates out of Branson, Missouri, was hawking just such a “miracle” cure until GOP Missouri Attorney General Eric Schmidt’s office filed a lawsuit to shut it down this week.
 
Bakker’s “silver solution” was touted as a cure not only for coronavirus, but also for other ailments. He has sold the colloidal silver products for up to $125. As of Thursday, the item was no longer available on Bakker’s website, but a search turned up several items touting the “benefits” of silver solution. Bakker went to prison in 1991 on fraud and conspiracy charges, but he was paroled in 1994 and has reconstituted his televangelist career.
 
While the Federal Trade Commission and the Food and Drug Administration also have pursued Bakker, states are able to act quickly because they are on the ground near where the frauds are happening. In the Bakker case, Missouri was familiar with Bakker’s ministry and swooped in Tuesday, said Schmidt’s spokesman, Chris Nuelle.
 

The New York Attorney General’s Office also sent Bakker a “cease and desist” letter and the FDA and the FTC also have warned Bakker to stop selling the stuff. Missouri was the first state to sue.

Newsworthy events always trigger scammers and the bigger the event, the greater the scams, said Todd Leatherman, program counsel for the National Association of Attorneys General Training and Research Institute and a former attorney for the Kentucky Attorney General’s Office.

That means the attorneys general in each state are quickly swinging into action, and the NAAG has set up a website for consumers to file complaints with each state attorney general’s office.

In New Jersey, local media reported a convenience store owner sold a spray “sanitizer” that burned four children. Manisha Bharade, of Wood-Ridge, was charged with endangering the welfare of children and deceptive business practices.

On the River Vale, New Jersey, police department’s Facebook page, officers warned the public not to use any hand “sanitizer” bought at the River Vale 7-Eleven.

Democratic New Jersey Attorney General Gurbir Grewal warned potential fraudsters that they will be prosecuted. “Businesses seeking to take advantage of vulnerable consumers during a State of Emergency will face serious consequences,” he said in a news release. Separately, Grewal said the number of coronavirus-related price gouging incidents has risen to 270 in the state.

In New York, Democratic Attorney General Letitia James ordered two New York City merchants to stop charging customers excessive prices for hand sanitizers and disinfectant sprays.

In a news release, the office said investigators confirmed that an Ace Hardware store in Manhattan was charging customers $79.99 for a bottle of hand sanitizer; and that a market in Astoria, Queens, was charging $14.99 for a bottle of disinfectant spray.

Attorneys general in most states are asking residents to report instances of price gouging to their local law enforcement offices or attorneys general.

More than 30 states have declared states of emergency, which trigger emergency price gouging laws.

“It is rare for a state to interfere with commerce,” North Carolina’s Stein said, but in severe cases he said it’s necessary.

As if being the most vulnerable to the coronavirus was not enough, senior citizens also are most vulnerable to scams.

Sharing information is critical, said Kathy Stokes, director of AARP’s fraud prevention program. “It’s important to report” efforts at fraud, she said in a phone interview. She said the organization for people over 50 is “seeing an upward trend” in scams as news about the coronavirus ramps up.

“The important thing is to look to trusted resources for information about coronavirus — the WHO [World Health Organization] or the CDC,” she said. “Any time you see something that looks like an opportunity or something that will help you, engage your inner skeptic.”

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