AG warns merchants about baby formula price gouging

Acting Attorney General Matthew Platkin and the Division of Consumer Affairs on May 19 warned merchants and consumers about price gouging and potential fraud concerning the sale of baby formula in New Jersey.

The price gouging law was triggered two days ago when Gov. Phil Murphy signed Executive Order No. 296 to address the baby formula in the state. The State of Emergency restricts excessive price increases, which is defined by exceeding 10% of the price the product or service was sold during the normal course of business prior to the order.

“The current baby formula shortage may have scammers and unscrupulous vendors coming out of the woodwork to take advantage of parents at a vulnerable time,” said Platkin. “We are putting merchants on notice that we stand ready to take action and hold accountable those who exploit any crisis for financial gain.”

The price-gouging violations come at a stiff price: up to $10,000 for the first offense and $20,000 for the second and subsequent offenses. And each individual sale of merchandise is considered a separate and distinct violation. Violators may also be required to pay consumer restitution, attorney’s fees, and investigative fees.

So far, the Division has received roughly 16 consumer complaints, approximately half after the State of Emergency was declared. The Division also said that it is aware of online scams.

“As we continue to review reports of alleged price gouging and other questionable tactics, we ask consumers to help us by reporting an excessive prices and scams they observe while shopping for baby formula,” said Cari Fais, acting director of the Division of Consumer Affairs. “The Division is prepared to take action against violators, but when it comes to consumer protection, New Jerseyans can also pay an active role in putting a stop to price gouging and fraud.”

The Division of Consumer Affairs recommends consumers take the following precautions to protect themselves against scams and fraud:

• Use known and reputable merchants
• Do research before buying
• Check expiration and packaging
• Beware of certain foreign distributors
• Check with pediatricians first

Anybody who believes they were a victim of price gouging is encouraged to file complaints online here: File a Complaint · Basic Portal (state.nj.us)

Further guidance about the state’s efforts to address the baby formula shortage is available at www.nj.gov/babyformula.