The Michigan Department of Attorney General is issuing court-authorized subpoenas in its investigation of a Muskegon business that has reportedly been accepting payment for face masks, including N-95 masks, but failing to provide consumers with the products, which have become highly sought after due to the spread of the coronavirus disease 2019 (COVID-19).
The Attorney General’s office issued subpoenas for records from EM General LLC to shed light on its business practices, including sales records and other financial information, customer correspondences, supply of goods and advertising records, among other things. Subpoenas will also be used to acquire testimony from EM General employees engaged in the company’s operations.
Muskegon County Circuit Court Judge William Marietti granted the Attorney General’s petition for the subpoenas.
The company is likely in violation of the Michigan Consumer Protection Act for several reasons, including price-gouging, misleading customers about its goods or services, advertising goods or services without the intent to provide those to purchasers and failing to provide consumers with refunds.
"My office will act swiftly against any business that thinks it can dupe consumers,” Nessel said. “We will continue to investigate complaints and take appropriate action to ensure consumers are being treated fairly and that they are not being taken advantage of by companies that are explicitly breaking our laws.”
EM General’s website was selling “antiviral” N-95 masks for around $25 apiece. A 10-pack box of N-95 masks generally sells for closer to $15. Delays in providing the product to consumers were blamed on a high demand for the masks, and because of a “nationwide lockdown (COVID-19),” though no such lockdown exists. Company emails also show discrepancies in the CEO’s name, referring to him as “Dennis Rivera” and “Mike T.”
One person who purchased multiple masks from the company on March 4 inquired whether her order was completed as she had not received any confirmation. The company never replied to that inquiry.
Around two weeks later, company emails led the consumer to believe that EM General had received inventory on March 13 and was shipping products in the order purchases were made. It also said customers would get tracking numbers once shipping began and the product was to arrive six to eight days later.
On March 29, the same consumer received yet another email from the company with similar information, but different dates. EM General said it received inventory on March 19 and was shipping on that date, rather than March 13 as previously noted.
The Better Business Bureau provided the Attorney General’s office with 87complaints about EM General for similar issues, including failing to provide goods to purchasers from across the U.S.
One victim reported receiving emails from the company that noted the demand for N95 respirator masks was “high,” that there were delays in shipping as they were “importing masks from Turkey.”
Certain masks advertised as N-95s may be imported counterfeits and not actually carry that official designation or offer the same level of protection. The Centers for Disease Control and Prevention (CDC) offers guidance on how to distinguish between legitimate respirators and counterfeits.
Meanwhile, there have been 3,630 COVID-19-related price-gouging complaints made to the Attorney General’s office as of 7 a.m. today.
Moreover, Gov. Gretchen Whitmer issued an executive order on price-gouging which states a person must not offer for sale or sell any product in this state at a price that is more than 20 percent higher than what the person offered or charged for that product as of March 9, 2020, unless the person demonstrates that the price increase is attributable to an increase in the cost of bringing the product to market or to an extraordinary discount in effect as of March 9, 2020.
Consumers can file a complaint online or by calling the Consumer Protection tip line, 877-765-8388. Hours of operation are between 8:30 a.m. and 4:30 p.m. Monday through Friday.