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Opinion
27 March 2020

Price-gouging: Cashing in on coronavirus

When the price isn't right.

When $50 bottles of hand sanitiser began appearing on Trade Me, the website was quick to dismiss calls to clamp down on sellers, claiming it was just supply and demand in action.

That’s not what we’d call it. In our book, it’s price-gouging.

After coming under flak for its stance, Trade Me had a change of heart and said it would pull items from sale where sellers were engaging in this type of behaviour.

Unfortunately, there appears to be other traders trying to make hay out of the pandemic. This week, we’ve had reports from consumers about face masks advertised for more than four times their usual price and hand sanitiser for as much as $150 a litre.

Not surprisingly, much of this behaviour has been seen online where unscrupulous traders have more opportunity to hawk their wares. These hucksters come out of the woodwork whenever public health emergencies or natural disasters provide an opportunity to make a buck by preying on consumers’ concerns.

Along with inflated prices, there’s also been the usual raft of products making unfounded claims about their health benefits.

Teas, essential oils and colloidal silver are among products touted as treatments for coronavirus.

One US website, herbalamy.com, was selling tea and other herbal concoctions it claimed would prevent you getting the disease. “All the herbs are specific in one way or another for this virus. A number of the herbs are strongly antiviral for coronaviruses,” it claimed.

Not to be outdone, coronavirusdefence.com recommended its “boneset tea” six times a day as a treatment if you contracted the disease. According to the company, the tea was effective for “coronavirus infections, including SARS”.

Both traders have received warning letters from the US Federal Trade Commission telling them to drop the claims.

Our experience tells us it’s probably too much to expect this sort of behaviour to stop anytime soon.

Over the coming weeks, we’ll be keeping a close watch on the market to identify companies that are trying to exploit consumers, whether it’s by hyping products with no benefits or inflating prices.

While price-gouging isn’t illegal – we think it should be – it’s illegal to mislead consumers about the reasons why prices are going up and the purported benefits of a product. Where those reasons aren’t genuine, companies will be breaching the Fair Trading Act and face a fine of up to $600,000.

What you can do

If you spot a trader doing the wrong thing, let us know. Email us at info@consumer.org.nz with:

  • details of the product, the price and/or claims made (a photo would be great)
  • the name and location of the store (or the website address if you found the product online).

If you think the trader is making a misleading claim, you can also complain to the Commerce Commission – comcom.govt.nz.

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Coronavirus (Covid-19)

Read our latest articles on the Covid-19 pandemic. Got a consumer-related question about coronavirus? Email us at info@consumer.org.nz and we'll do our best to help.

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