Since the time Governor Herbert declared a state of emergency as a result of COVID-19, the Utah Division of Consumer Protection has been aggressively pursuing local companies and individuals suspected of price gouging, particularly related to the sale of medical supplies and equipment or other consumer goods in high demand at this time. An accusation of price gouging is serious, especially given the potential penalties. Although there is no federal law directed specifically at price gouging, most states have laws similar to the law in Utah.
Utah law specifically prohibits a person from charging “a consumer an excessive price for goods or services sold or provided at retail” during the time an emergency exists – i.e. price gouging. This means that the price for a good or service cannot exceed more than 10% the average price charged for the good or service in the 30 day period immediately preceding the day on which the state of emergency is declared.
An increase of more than 10% in the cost of a good or service during a state of emergency may not be considered price gouging if the cost of obtaining the good or providing the service increased during the state of emergency.
While the penalty for price gouging includes an administrative fine of up to $1,000 for each instance, the Utah Division of Consumer Protection has discretion in meting out penalties and will consider individual circumstances when considering penalties for an individual or entity accused of this practice.
An accusation of price gouging is serious, especially given the potential penalties. If you have any questions about the contents of this article, please contact Katherine Priest at (801) 323-3393 or moc.nqr@tseirpk, or visit us at www.rqn.com.
Katherine Priest is a member of RQN’s Employment Section, White Collar, Corporate Compliance, and Government Investigations Section, and our COVID-19 Response Team. She is assisting with questions related to COVID-19, price-gouging, criminal defense, compliance, and employment.