LANSING – Michigan Attorney General Dana Nessel has joined a coalition of 16 attorneys general in urging Congress to pass federal price gouging legislation. In a letter sent to U.S. House of Representatives and Senate leadership (PDF), Attorney General Nessel and the coalition called for a federal prohibition on price gouging to address critical gaps in state enforcement and protect consumers and small businesses. 

Currently, 40 states have statutes that prohibit certain aspects of price gouging. The letter highlights how these laws reflect the widespread national consensus that it is unjust and economically harmful to exploit consumers by inflating prices for essential goods and services in the immediate aftermath of a disaster.  

The coalition argues that a federal ban would assist consumer-facing retailers, especially small businesses, who often bear the brunt of the reputational and legal consequences of disaster-induced higher prices, even when the most significant price gouging activity may be happening up the supply chain – outside the jurisdictional reach of some states’ price gouging laws. Attorney General Nessel and the coalition also outlined four key benefits of a federal price gouging ban: 

• Pausing panic-driven pricing decisions;
• Preventing inefficient pricing in the heat of a disaster;
• Discouraging hoarding; and
• Restraining pricing for products with little competition.

“Price gouging is an unscrupulous practice that takes advantage of customers during their most vulnerable moments,” Nessel said. “We should all be able to agree that consumers need to be supported, not exploited, in the aftermath of a disaster. I am proud to stand with my colleagues in advocating for a national ban on price gouging, and I will continue to call for stronger consumer protection laws in Michigan to protect small businesses and consumers.” 

The Attorney General has been a strong advocate for consumer protection against price gouging. In July, Attorney General Nessel filed a lawsuit against several tree service companies for allegedly deceiving and price-gouging consumers seeking storm clean-up services. She has also reached compliance agreements with Novi Hilton and pharmacies suspected of price gouging. However, under the current Michigan Consumer Protection Act, action is only possible when a single business, or a small group of businesses, charge excessive prices compared to others, not if sellers hike their rates in unison.

The Attorney General recently participated in a roundtable discussion alongside Michigan lawmakers who seek to strengthen the State’s tools against price-gouging announcing the introduction of Senate Bills 954-956. Senate Bills 954-956, which the Michigan Department of Attorney General testified in support of earlier this month, target price gouging on consumer goods, emergency supplies, lodging, and energy products like gasoline or propane. The bills define price gouging as selling goods or services at more than a 10 percent increase from the price immediately before the emergency or market disruption. The legislation would allow sellers to justify price increases and outlines legal actions the Department of Attorney General or local prosecutors can take against violators, as well as penalties for those found in violation.

Joining Attorney General Nessel in sending the letter to Congress are the attorneys general of California, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Vermont, and the District of Columbia.

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