Kansans: Watch Out for Profiteering from Coronavirus

A pandemic, such as the current Coronavirus Disease (COVID-19) caused by the severe acute respiratory syndrome coronavirus 2 is a serious national disaster that will affect Kansans for the foreseeable future. Unfortunately, there are some unscrupulous businesses that will take advantage of the situation to make a significant profit by profiteering. For nearly two decades, Kansas has had an anti-profiteering law on the books but unfortunately, information about the scope of our consumer protections, especially on the state level, is hard to come by. To his credit, on March 12, 2020, Kansas Attorney General Derek Schmidt told the press that he would enforce the law, and also issued a press release stating, generally, “use caution against scams involving COVID-19” but no single government official has actually informed Kansans what to look out for, or the scope of the consumer protections that currently exist.

Kansas Governor Laura Kelly and President Trump’s recent Emergency Declarations have triggered a little used Kansas law that operates to provide enhanced consumer protections to all Kansas citizen consumers. In 2002, the Kansas legislature passed a price gouging statute in response to certain businesses increasing prices after the attacks on 9/11. The statute, found at K.S.A. 50-6,106 has made it an unconscionable act within the meaning of the Kansas Consumer Protection Act for any “supplier to profiteer from a disaster.” The law is specifically designed to prevent profiteering on any necessary goods and services, such as food, emergency supplies, medical supplies, heating fuel, gas, lodging, and building materials and services.

The law is triggered during the “time of disaster” which can be independently established by a Judge in court. This is most common in a local disaster event like minor a tornado or flood or as soon as there is a declaration of a “state of emergency by the president of the United States or the Governor.” Thus, due to the state of emergency declarations on March 13, 2020, the profiteering from disaster statute is in full force and effect. This period of disaster lasts the entire length of the declaration, or 30 days after the event that constitutes a disaster, whichever is longer. In a situation like the Coronavirus pandemic, this disaster could last a year or more, and with it, the consumer protection found in statute.

There is little wiggle room for unscrupulous suppliers under the law. Any unjustifiable increase of the price of necessary products or services during a state of emergency, like we are currently experiencing, is a violation of the law. The Kansas law, however, also separately states that any increase of price of necessary goods and services of more than 25% is prima facie (i.e., presumptive evidence) of unconscionable profiteering under the law. The law applies to sales of any “necessary Goods and services” so think food, fuel, heating oil, medical supplies, lodging costs, costs for clean up and rebuilding, and even gas for your car.

To spot a violation of the law, be on the lookout for these practices:

(1) the price charged on the necessary product or service was grossly increased from the prior businesses day. For example, if gas for your car $2.00 per gallon yesterday, and today it is $4.75 per gallon, the statute may be triggered.

(2) If the price increased by 25% at any point after the disaster started, you might be witnessing a violation.

(3) If other businesses in the area are selling the same necessary product or service for 25% less than the supplier in question, the statute is also triggered.

Any of these acts is a violation of the Kansas Consumer Protection Act. If a court finds a supplier in violation, of the Kansas Consumer Protection Act the supplier could be liable for up to $10,000.00 per violation (and in some cases, per day, per violation), plus reasonable attorney’s fees. If a supplier engages in these activities with consumers that are over 60, military families and the disabled, the fines could be as much as $20,000.00 per violation.

If you see a supplier profiteering on a necessary good or service in Kansas, take note, and document everything. Take pictures of pricing, talk to people, and get names of witnesses that can back up your claims. If you are the victim of profiteering, keep your receipts and any bank or credit card statements and build a timeline of events that led to the event. Instances of profiteering can be reported to the Kansas Attorney General or your local law enforcement agency or you may be able to recover damages in a private action. If you believe you have been the victim of profiteering as a result of the Coronavirus pandemic, we may be able to help.

Tai J. Vokins is an attorney licensed to practice in state and federal courts in Kansas. Mr. Vokins has been recognized as a top rated consumer law attorney since 2012 and has prior experience as an Assistant Attorney General in the Consumer Protection Division of the Office of the Kansas Attorney General. If you have questions about consumer rights, call Tai at 785-842-6311.

The information and materials on this blog are provided for general informational purposes only and are not intended to be legal advice. The law changes frequently and varies from jurisdiction to jurisdiction. Being general in nature, the information and materials provided may not apply to any specific factual and/or legal set of circumstances. No attorney-client relationship is formed nor should any such relationship be implied. Nothing on this blog is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction. If you require legal advice, please consult with a competent attorney licensed to practice in your jurisdiction.