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AG Office Takes Legal Action Against Ann Arbor Business in Price-gouging Investigation
March 30, 2020
Michigan Attorney General Dana Nessel is moving forward with an investigation into price-gouging by A.M. Cleaning & Supplies after her office received court approval for investigative subpoenas requiring the Ann Arbor-based business to provide information or face legal consequences.
Washtenaw County Circuit Court Judge David Swartz on Friday approved the Attorney General’s request for the subpoenas, which will compel the business to provide transaction records throughout the month of March as well as testimony from the owner and employees.
Meanwhile, reports to the Attorney General’s office of price-gouging related to the coronavirus disease 2019 (COVID-19) have reached 2,099 since early March when the office began tracking those complaints. That includes 1,121 complaints received via phone through the Consumer Protection tip line and 978 complaints filed online.
The Attorney General’s office has received 11 consumer complaints against A.M. Cleaning that allege the store drastically increased its prices of hand sanitizer. Complaints began after the business posted a message on social media advertising hand sanitizer at $60 for a 12-ounce bottle, $40 for an 8-ounce bottle and $20 for a 4-ounce bottle. Days before, the bottles were reportedly priced at $7.50, $5 and $2.50, respectively.
“Legal recourse is not the preferred option, but my office will take any necessary steps to determine whether reports of price-gouging are valid,” Nessel said. “Businesses must play by the rules and if a company is breaking the law, we will hold it accountable. Michigan consumers looking to buy products they need or to protect their health during this pandemic will not be subjected to excessively high prices.”
The Attorney General’s office sent a cease and desist letter to A.M. Cleaning & Supplies on March 11. But conflicting statements in the business’ response to that, along with evidence obtained from consumers who purchased hand sanitizer at the store, led investigators to seek the subpoenas and continue their investigation into what could be a violation of the Michigan Consumer Protection Act (MCPA).
Businesses could be in violation of the MCPA if they are:
- Advertising or representing goods or services with intent not to dispose of those goods or services as advertised or represented.
- Charging the consumer a price that is grossly in excess of the price at which similar property or services are sold.
- Causing coercion and duress as the result of the time and nature of a sales presentation.
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.??
Click here to view the court order authorizing the subpoenas.
Click here to view the petition filed by the Attorney General’s office.
Information around this outbreak is changing rapidly. The latest information is available at Michigan.gov/Coronavirus and CDC.gov/Coronavirus.