Colorado business agrees to pay $70,000 to the State after misleading buyers about masks and respirators, price gouging during COVID-19 crisis
Jan. 25, 2021 (DENVER, Colo.)—Attorney General Phil Weiser today announced his office has reached a settlement with Denver-based Nationwide Medical Supply Inc., after the business made misleading claims about the masks and respirators it sold and charged unreasonably excessive prices for those products during the COVID-19 public health emergency.
“During a public health emergency, Coloradans and Colorado businesses need to be able to trust that the potentially life-saving products they are purchasing are as advertised,” Weiser said. “We must hold irresponsible businesses accountable for deceptive practices, especially those that have the potential to cause direct harm to consumers.”
Nationwide Medical Supply sold personal protective equipment and supplies beginning in April 2020. The company made false and misleading claims about those supplies, such as:
- Marketing a KN95 mask as an N95 respirator;
- False claims that a KN95 mask had a “510(k) number for the medical market”;
- False claims that an N95 respirator and a KN95 mask were “FDA/CE approved”; and
- Use of the FDA logo in violation of applicable law.
The State tested the filtration of two masks the company sold and found that while one mask performed at the advertised 95% removal filtration, a second mask did not meet the advertised 95% removal filtration, testing instead at approximately 70%.
The State also alleged the company engaged in price gouging. House Bill 20-1414, which passed in the Colorado legislature last year, prohibits price gouging during public emergencies. Nationwide sold masks for a markup that in some cases exceeded 250% of Nationwide’s costs in obtaining the masks. In at least one instance, the company authorized salespeople to negotiate prices with Nationwide’s customers and offered the salespeople a commission based on their ability to sell masks to “Medical and Government” purchasers for higher prices.
Nationwide agreed, as part of the settlement, to stop making false or misleading representations about the masks or respirators it markets and sells, and to ensure the equipment it sells and the certificates attached to the equipment are authentic and valid.
The company also agreed to stop charging excessive and unreasonable prices during the pandemic, and to pay $70,000 to the State. The money will be used for reimbursement of the State’s actual costs and attorneys’ fees, the payment of restitution, if any, and for future consumer fraud or antitrust enforcement, consumer education, or public welfare purposes.