AG’s office signs agreement with Oakland County business after alleged price-gouging of masks

Posted at 12:45 PM, Dec 21, 2020

LANSING, Mich. (WSYM) — The Michigan Attorney General’s office reports one Oakland County business price gouged masks during the pandemic.

Attorney General Dana Nessel’s office recently signed an agreement with Smokehouse Distribution, an Oakland County business in Commerce Township that allegedly violated the Michigan Consumer Protection Act (MCPA) by engaging in practices like price-gouging.

The AG’s office says the business was advertising excessively priced face masks for sale on a website called BeamerSmoke. The Attorney General’s office began receiving consumer complaints about the business in April, and sent a cease and desist letter in early May.

Smokehouse Distribution advertised surgical-type masks at two for $18 and admitted to investigators that the masks were purchased for about 56 cents apiece, according to the Attorney General’s office. The proprietor also said the higher price was an error that was addressed as soon as it was discovered. However, the price for two masks then dropped to $12 and $10, still a significant markup.

The owner indicated only 17 sales of face masks occurred through the website, but an invoice provided to the Attorney General’s office shows the business purchased nine cases of 2,000 masks each from a supplier.

The Assurance of Voluntary Compliance (AVC) agreement with the business follows an investigation by the Attorney General’s office after it received approval for civil investigative subpoenas from the Oakland County Circuit Court on June 23, 2020.

The AVC requires the business to refund customers who purchased the over-priced personal protective equipment and refrain from selling such products again for COVID-19 purposes.

Under terms of the AVC, the seller will provide full refunds to specific consumers who purchased face masks and gloves on the company’s website in April. Customers who will receive a refund will be contacted by the business. Refunds must be provided to consumers within 60 days.

The AVC also requires:

  • A $2,000, one-time payment made to the Michigan Department of Attorney General to cover investigation costs;
  • An assurance by the seller that no face masks will be sold or advertised for any medical or COVID-19 protection purposes.

To view more about the MCPA and the Attorney General’s efforts to protect consumers, visit the department’s website.