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Investor Alert

July 16, 2020, 4:55 a.m. EDT

Mandatory face coverings raise the risk of predatory sellers bumping up prices

Prime Minister Boris Johnson has said shoppers are required to wear masks from July 24 in England, sparking fears that predatory sellers could bump up prices as demand jumps.

By Archie Mitchell


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U.K. Prime Minister Boris Johnson said on Monday face coverings would be mandatory for shoppers in England (Ben Stansall-WPA Pool/Getty Images)

Consumers face being hit by surging prices for protective gear as face coverings become mandatory for shoppers in England, a consumer group said.

U.K. Prime Minister Boris Johnson said on Monday the measure will come into place on July 24, sparking fears that predatory sellers could bump up prices, known as price gouging, as demand jumps. Prices have already jumped on some websites.

Many sellers of masks and other equipment were accused of price gouging early on in the coronavirus outbreak as rocketing demand for the kit led to prices soaring, reportedly quadrupling in some cases.

The practice has been rebuked by large U.S. companies including online retailers eBay (NAS:EBAY) and Amazon (NAS:AMZN) and consumer goods manufacturer 3M (NYS:MMM) .

Read: 3M says it continues to see counterfeit, overpriced masks being sold

Amazon warned third-party sellers against price gouging masks on its platform with eBay banning the listing of masks and sanitizer altogether, while 3M is engaged in a lawsuit over counterfeiting and price gouging of its masks.

“With face coverings being made compulsory in England’s shops there is a risk that unscrupulous sellers will try to sell face masks at hugely inflated prices, as we have found with other essential items during this pandemic,” said Neena Bhati, head of campaigns at the consumer watchdog Which.

Read: 3M says ceasing exports of N95 masks will have ‘opposite’ effect, humanitarian consequences

Which is calling for emergency legislation to control the price of essential items, including face masks, and said the U.K.’s financial watchdog the Competition and Markets Authority must crack down on price gouging.

“The CMA must, where appropriate, do its best to use the existing powers it has to crack down on any individual or business found to be exploiting others during this time of crisis,” Bhati said.

Link to MarketWatch's Slice.