BBB Scam Alert: False Advertising and Pandemic Price Gouging

BBB | March 27, 2020

The relationship between businesses and consumers is increasingly important during a pandemic. Better Business Bureau (BBB) warns businesses against raising prices for critical items, not just because it is illegal, but because consumers are impressionable and looking to trustworthy businesses at this time of crisis. Amidst recent progressions of the novel virus COVID-19, consumers are experiencing an increase in price gouging and misleading claims.

Price gouging refers to significantly increased prices on goods. Businesses may elevate prices for products to take advantage of consumers who are looking to secure necessities, including masks, disinfectants, food, and other essential supplies. During a declared state of emergency, it is illegal for businesses to raise the price of essential goods or services by more than 10%, unless it can be shown that business costs are substantially increased. BBB is seeing an increase in consumer complaints for deceptive offers and price gouging.

“Businesses play a crucial role in maintaining a strong community in challenging times and should follow ethical advertising practices,” said Michael Sedio,  VP and General Counsel at the Better Business Bureau. “At this time, transparent and honest communication is imperative.” Communications with consumers should include updates on necessary business protocol to mitigate the potential spread of COVID-19. Businesses should be honest with consumers regarding timelines and product availability, set clear expectations, and communicate immediately as information becomes available.

Scammers are contacting consumers through phishing emails that solicit products claiming to cure COVID-19, at the expense of the consumer’s personal or financial information. Headlines are used to prey on fear and create a sense of urgency that pressures the consumer into acting without thorough research.

Be a savvy consumer. Only make purchases through reputable websites, and before sharing payment information, make sure the store has a physical address and working phone number. Check bbb.org for reviews and ratings.

Compare pricing. It is important to compare similar products, considering size, model numbers and manufacturers.

File a Price Gouging Complaint. Provide as much detail as possible. Include the business name, address, and the names of any employees involved. Attach documentation in the complaint, such as photos or receipts.

Price gouging and fake products may be reported to BBB’s Scam Tracker, or file a complaint with BBB.

Unethically raising prices and using deceptive advertising and product claims is a violation of BBB’s Standards of Trust, which encourages businesses to build trust through honesty, transparency, and integrity. BBB suggests business owners and community leaders abide by these best practices for operating under current restrictions. 

For more information or to schedule an interview with myself or a BBB spokesperson, please contact me at (602)-212-2204, (480) 295-1361 or tierra.terry@bbbcommunity.org. For more information regarding Coronavirus (COVID-19), visit our dedicated resource site at https://www.bbb.org/coronavirus-business/, and national news at https://www.bbb.org/council/coronavirus/

About Better Business Bureau Serving the Pacific Southwest. 

For more than 100 years, Better Business Bureau (BBB) has been helping people find businesses and charities they can trust. In 2019, people turned to BBB more than 358 million times by checking more than 232 million Business Profiles views – all available to the public for free at bbb.org. Incorporated locally in 1938, BBB Serving the Pacific Southwest covers Greater Arizona and Southern California with key campuses in Phoenix, San Diego, Newport Beach, Prescott, Yuma and Lake Havasu City. BBB Serving the Pacific Southwest is supported by over 19,000 BBB Accredited Businesses, making it one of the largest BBB nationwide. Businesses that earn BBB Accreditation contractually agree and adhere to high standards of ethical business practices in the marketplace. BBB provides objective expertise and educational programs on topics affecting marketplace trust.

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