Profiteers be warned: Maine has a law against price-gouging

Thu, 03/19/2020 - 6:00pm

    Emergencies have a way of bringing out the best and worst in people and for those who tend toward the latter, Maine has a price-gouging law to protect consumers.

    Under Title 10, MRSA, section 1105, which prohibits “profiteering,” the Governor must first declare that an “abnormal market disruption” has occurred. That took place on March 17, when Gov. Mills issued a proclamation stating, in part:

    “NOW THEREFORE, I, Janet T. Mills, Governor of the State of Maine ... hereby declare and proclaim ...  COVID-19 has created an abnormal market disruption.”

    The proclamation specifically mentions retail and wholesale sales of daily “necessities” –  paper products, cleaning supplies, hand sanitizers and personal hygiene products, medicine and medical supplies and food and water. 

    It warns against profiteering, saying “A person may not sell or offer for sale these necessities at an unconscionable price and violations may be prosecuted as unfair acts or practices ...”

    So, you might ask, with 12 rolls of Cottonelle selling on Amazon for $449.99, what does Maine’s law consider to be an “unconscionable price?”

    There is a formula to calculate that. According to the statute, “unconscionable” sets a pricing limit of 15% plus costs more than the pre-declaration price. And if the seller did not sell the goods or services prior to the declaration, prices cannot exceed 15% plus costs as the same goods sold by others.

    The anti-gouging law was amended in 2006 to clarify earlier language describing “unreasonable or unjust profit” which was, according to a memo from Francis Ackerman, an assistant attorney general at the time, “Probably unconstitutionally vague.”

    And to prove that life serves up irony, the representative who originally sponsored the 2006 amendment that clarified the term was the governor who just signed the proclamation!  

    The proclamation (and the price-gouging provisions) remain in place for 60 days or can be ended sooner or changed by the Governor.

    Violations of this law can bring hefty fines and prosecution as an unfair trade practice under the state’s consumer laws.  Fair trade practice violations are pursued by the state’s Attorney General.

    And a final word of caution: If you’re thinking of turning to eBay for scarce goods, carefully check the shipping fees before you buy. Some online sellers are charging as much as $30 to ship a package of toilet paper.