Department of Consumer and Worker Protection Settles Price Gouging Case with Metro Drugs | City of New York

Consumer and Worker Protection


Department of Consumer and Worker Protection Settles Price Gouging Case with Metro Drugs

June 26, 2020

Consumers Encouraged to Claim Restitution if Metro Drugs Overcharged them for Face Masks, Gloves, or Disinfecting Wipes

NEW YORK, NY – Department of Consumer and Worker Protection (DCWP) Commissioner Lorelei Salas today announced that Metro Drugs (931 Lexington Avenue, Manhattan) has agreed to provide restitution to consumers who it overcharged for face masks, gloves, or disinfecting wipes on or after March 5, 2020. Consumers who have their receipt should present it to the store and request restitution. This agreement resolves DCWP’s allegations that Metro Drugs repeatedly price-gouged consumers on COVID-19 related products. As part of the settlement, Metro Drugs also agreed to pay a $25,900 fine and $39.97 to one consumer named in the case.

“From the beginning of the COVID-19 pandemic, our message has been loud and clear—price gouging will not be tolerated in NYC,” said DCWP Commissioner Lorelei Salas. “We are pleased we were able to reach a resolution with Metro Drugs that ensures consumers can still come forward to claim restitution. Face masks have proven to be lifesaving and we remain vigilant in ensuring that New Yorkers are not overcharged as the city reopens and we head back to work.”

In March, DCWP received 23 complaints about Metro Drugs and, during three inspections, issued more than 100 violations for price gouging of face masks—as high as $200 for 20 masks. It was the first case that charged a business with repeatedly price gouging. DCWP has filed a total of eight cases against repeat offenders seeking up to $214,000 in fines for 428 price gouging violations.

Since March 5, DCWP has received more than 11,000 complaints and issued more than 11,300 violations for price gouging. DCWP continues to actively inspect stores based on consumer complaints. Businesses found to be overcharging consumers 10 percent or more for any personal or household good or service that is needed to prevent or limit the spread of or treat COVID-19 may be issued a violation. Examples of covered products include disinfectants, soap, cleaning products, diagnostic products and services, and medicines.

DCWP encourages consumers who are overcharged to file a complaint at nyc.gov/dcwp or by contacting 311 and saying “overcharge.” Consumers who believe they were victimized by price gouging should keep their receipts and any information about the store where the transaction occurred and file a complaint with DCWP. If the price gouging occurred while DCWP’s regulations were in effect, DCWP can prosecute the illegal activity.

In March, the Agency promulgated an emergency Rule under the City’s Consumer Protection Law that makes price gouging illegal for any personal or household good or service that is needed to prevent or limit the spread of or treat new coronavirus (COVID-19). On May 13, DCWP extended the Rule for an additional 60 days and, as part of the extension, proposed a new permanent Rule that contemplates future emergencies. The permanent Rule goes into effect on June 26 and makes price gouging illegal for any products or services essential to health, safety and welfare during a declared state of emergency. The fine for price gouging is up to $500 per item or service. If businesses are paying more to obtain these items themselves, they must provide proof to DCWP and any increase must be comparable. If a business paid $2 more per item, they cannot charge customers $50 more.

The NYC Department of Consumer and Worker Protection (DCWP) protects and enhances the daily economic lives of New Yorkers to create thriving communities. DCWP licenses more than 75,000 businesses in more than 50 industries and enforces key consumer protection, licensing, and workplace laws that apply to countless more. By supporting businesses through equitable enforcement and access to resources and, by helping to resolve complaints, DCWP protects the marketplace from predatory practices and strives to create a culture of compliance. Through its community outreach and the work of its offices of Financial Empowerment and Labor Policy & Standards, DCWP empowers consumers and working families by providing the tools and resources they need to be educated consumers and to achieve financial health and work-life balance. DCWP also conducts research and advocates for public policy that furthers its work to support New York City’s communities. For more information about DCWP and its work, call 311 or visit DCWP at nyc.gov/dcwp or on its social media sites, Twitter, Facebook, Instagram and YouTube.

Abigail Lootens | Melissa Barosy

(212) 436-0042