CA's Price Gouging Laws Ripe For Change Amid Coronavirus Pandemic

ORANGE COUNTY, CA — State officials have pledged to call for changes to an aging price gouging law. The effort would prevent non-established sellers from taking advantage of buyers' fears with irrational price margins.

Price gouging in California was most recently seen in Baldwin Park, when a Covina man allegedly marked up the price of N95 masks well over the allowed 10 percent to sell online, according to authorities.

The "preying on fear" tactic is why Umberg previewed his bill Tuesday to include new sellers.

The current California law regarding price gouging has not been updated since 1992, an aide to Umberg said. As it stands, the law prevents established sellers from increasing prices by more than 10 percent during a state of emergency, but it says nothing on prices set by new sellers.

Umberg has full support from Orange County District Attorney Todd Spitzer and San Diego County District Attorney Summer Stephan.

This week, police investigators received a tip that a suspect was "selling N95 respirators online at high, price-gouging prices," Baldwin Park police said in a statement. Investigators arranged a meeting and purchased a box of respirators for $300, police said. Investigators said they arrested the seller and discovered 21 boxes containing 420 N95 respirators.

The suspect, identified as Johnwill Baldonado, 30, was charged with a misdemeanor price gouging offense and released on $1,000 bond, according to Baldwin Park police and the sheriff's department.

"During a state of emergency, the law prohibits charging a price that is more than 10 percent what an item cost before the state declaration of emergency," police said. "In an effort to protect our citizens, investigators we (were) able to identify, and locate the subject and make an arrest."

As of this report, it was unclear if he was an established or new seller as of this report. Based upon the current law, that is where the clarity needs to be made, according to Umberg. The law needs to reflect more current marketing strategies that make it easy for new businesses to overcharge, according to his statement.

"Exploiting the public's fear and panic is not a defense to engaging in criminal activity," Spitzer said. "Existing law left a loophole that allowed opportunists to take advantage of a crisis and overcharge customers for a product just because they had never sold that product before.

"This important legislation closes that loophole and ensures that those who shamelessly exploit people's vulnerabilities during a time of emergency are prosecuted. In this case, we do not reward entrepreneurship."

Stephan agreed.

"This bill will help close loopholes that allow greedy actors to escape accountability and ensures that California businesses don't charge abusive prices for health and consumer essentials during this national emergency," Stephan said.

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City News Service contributed to this report.