Coronavirus gouging? Texas AG sues auctioneer for allegedly jacking up prices on 750,000 face masks
The Texas attorney general is accusing an auctioneer of price-gouging disinfectant wipes, hand soaps, and 750,000 high-quality face masks — all items that are heavily sought after by consumers during the COVID-19 crisis.
"On March 24, bidding on N95 respirator masks pushed listings as high as $180 for a package of just 16 masks," Texas Attorney General Ken Paxton said on the agency's web site. "Auctions Unlimited owner Tim Worstell admitted to receiving warnings from both local police and the Texas Attorney General; however, he moved forward with the exorbitantly priced auctions."
The attorney general filed a lawsuit to stop Auctions Unlimited LLC from price gouging Texans for necessary health-related supplies. The recent auction "listed items necessary to combat the spread of the virus COVID-19," according to the lawsuit.
Texas authorities halted the auction before the 750,000 face masks were sold. But in court papers, Paxton cited a recent Chicago Tribune article that said the auction still netted about $154,000 in sales and earned Worstell personally about $40,000.
Amazon sold a set of 100 similar face masks for $4.21 in late January. The lawsuit seeks an injunction against the auctions and civil penalties of up to $10,000 per violation.
Coronavirus price gouging: 33 top cops demand action from Amazon, eBay, Craigslist, Facebook and Walmart
"Defendant is taking advantage of a disaster by offering for sale, and /or selling, necessities such as face masks, hand sanitizer, and cleaning supplies at exorbitant or excessive prices after Texas Governor Abbott declared a disaster on March 13, 2020," the lawsuit alleges.
But Worstell defended the auction and denied any price gouging, saying that he starts all auctions at $1 and lets bidders decide the fair value.
"It is literally impossible to price gouge using the auction method when ALL bids start at $1," he said in a statement to The Associated Press.
"The bidders, not Auctions Unlimited, decide the price. We did not, or attempt (to), collect a single penny from the auction as alleged. In fact we stated in the auction that no sales would be final until approved by the attorney general’s office," he said.
Price gouging has become a familiar complaint across the nation and around the world in the face of the coronavirus pandemic. President Donald Trump has signed an executive order that makes it a crime to hoard needed supplies during the emergency.
“The Texas Deceptive Trade Practices Act expressly prohibits anyone from selling necessary items at an excessive price when a disaster is declared and, despite repeated warnings from law enforcement, that is exactly what we’ve seen Auctions Unlimited do,” Paxton said. “My office will not tolerate anyone taking advantage of Texans in need and profiting from this health crisis.”
Out of business: Amazon removes more than 3,900 seller accounts from US store due to 'coronavirus-based price gouging'
Attorneys general from across the country are demanding that the companies that stock America’s vast virtual shelves — Amazon, Craigslist, eBay, Facebook, Walmart – crack down on price gouging for critical supplies from hand sanitizer to disinfectants during the coronavirus pandemic.
The group of 33 top cops sent a letter Wednesday urging the companies to heed their “ethical obligation and patriotic duty to help your fellow citizens in this time of need by doing everything in your power to stop price gouging in real time.”
"When consumers cannot get what they need to protect their homes and their loved ones — or, in this case, help prevent the spread of the virus — consumers suffer not only economic harm, but serious health consequences as well," the letter said.
This article originally appeared on USA TODAY: Texas AG's office halts auction for 750,000 face masks
