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

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.