Oakland County Business Put On Notice After Price-Gouging: AG

OAKLAND COUNTY, MI — An Oakland County business has been ordered to pay the state $2,000 and provide refunds to customers after Michigan Attorney General Dana Nessel said her office discovered the business was price-gouging by selling face coverings for nearly $20 apiece.

SmokeHouse Distribution in Commerce Township has been ordered to make a one-time $2,000 payment to Nessel's office to cover investigation costs while also assuring that it will not sell or advertise face masks for medical or COVID-19 protection purposes, according to a news release issued Monday.

An agreement signed between the attorney general's office and the business Monday also requires SmokeHouse Distribution to refund customers who purchased face coverings.

“From the outset, my office has been committed to protecting consumers from retailers who try to use this pandemic as an excuse to prey on the vulnerabilities of hard-working people,” Nessel said Monday. “We will continue to be vigilant and follow through on credible consumer complaints to ensure Michigan residents are not being taken advantage of.”

According to Nessel, SmokeHouse Distribution was advertising excessively priced face masks for sale on a website called BeamerSmoke. Nessel's office began receiving complaints about the business in April, and sent a cease and desist letter in early May, officials said.

An Assurance of Voluntary Compliance agreement with the business was signed following an investigation by the Michigan Attorney General's office after it received approval for civil investigative subpoenas from the Oakland County Circuit Court on June 23, 2020.

Under the agreement, the seller will provide full refunds to specific consumers who purchased face masks and gloves on the company’s website in April, officials said. Customers who will receive a refund will be contacted by the business and refunds must be provided to consumers within 60 days, Nessel said.

Smokehouse Distribution advertised surgical-type masks at two for $18 and admitted to investigators that the masks were purchased for about 56 cents apiece, according to Nessel. The proprietor also said the higher price was an error that was addressed as soon as it was discovered, Nessel said. However, the price for two masks then dropped to $12 and $10, still a significant markup, officials said.

Officials said the business owner indicated only 17 sales of face masks occurred through the website, but an invoice provided to Nessel's office shows the business purchased nine cases of 2,000 masks each from a supplier.

After Nessel's office contacted the SmokeHouse Distribution about the complaints it had received, the business returned much of its mask inventory to its supplier, according to a news release.

Under terms of the AVC, the seller will provide full refunds to specific consumers who purchased face masks and gloves on the company’s website in April. Customers who will receive a refund will be contacted by the business. Refunds must be provided to consumers within 60 days.