A Senate subcommittee, led by U.S. Sen. Richard Blumenthal (D-CT), found this week that the federal government lacks sufficient authority in preventing price gouging and fraud in COVID-19 scams. Blumenthal plans to introduce legislation to close legal loopholes.
“I am deeply frustrated and disappointed that federal enforcers have failed to do more,” said Blumenthal, who serves as chair of the Senate Subcommittee on Consumer Protection, Product Safety and Data Security. “Our consumer protection laws are dead letter if they are unenforced, and the Federal Trade Commission has to do more, has to do better, has to be more vigorous and assertive.”
Samuel Levine, director of the FTC's Bureau of Consumer Protection, said the agency has taken steps to combat and deter these scams, but social media remains the biggest threat.
“This battle remains uphill so long as the digital platforms continue to wash their hands of the fraud that they are facilitating,” Levine said.
Blumenthal said the FTC and Department of Justice have few legal tools to hold price gougers accountable. Connecticut’s district attorney has received 800 complaints of coronavirus-related price gouging and being sold counterfeit COVID tests and face masks since the start of the pandemic.
“We need to impose steep financial penalties and absolutely bring criminal charges. The one thing that these companies understand is prison time and criminal charges,” Blumenthal said. “Profiteering during a pandemic is reprehensible. It costs lives. It must end.”
Levine said the agency also plans to make more investments in consumer education about avoiding fraud.
