Iowa Attorney General Files 2nd Pandemic Related Price Gouging Case

August 05, 2020 3:56pm

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Iowa Attorney General Tom Miller has filed a second lawsuit alleging an eBay seller violated the price-gouging law during the COVID-19 pandemic.

Brenda Kay Noteboom of Orange City is accused of selling more than 320 items on eBay at excessive prices for a two-week period in mid to late March 2020. The items included toilet paper, paper towels, disinfecting and sanitizing products and other items needed by disaster victims. Noteboom realized more than $5,500 from the sales, the lawsuit alleges.

Noteboom is the sister of Michael Evan Noteboom, who was sued by Miller on April 26. The lawsuit accused him of charging excessive prices on more than 250 items on eBay. Michael Noteboom denies that he violated the price-gouging law.  

On May 7, Judge Third Judicial District Judge Patrick Tott signed an order granting a stipulated temporary injunction, in which Michael Evan Noteboom agrees to be enjoined temporarily from selling or buying items or merchandise needed by victims of the COVID-19 pandemic.

Since the beginning of the public health emergency, the office’s Consumer Protection Division has received 620 reports of price gouging, including 427 formal complaints.

“Through news reports, public-service announcements and other notices, our office has informed sellers and the public that we will not hesitate to protect consumers from price gouging,” Miller said.

Hand Sanitizer

“Price gouging can harm all consumers, even if they don’t purchase an item at an excessive price,” Miller said. For example, selling household items necessary for a pandemic at substantially increased prices can lead to panic, hoarding and shortages of items needed during an emergency.

A disaster declaration triggers the state’s price-gouging rule, which forbids excessive prices for goods or services “needed by victims of disasters.” An excessive price is one “not justified by the seller’s actual costs of acquiring, producing, selling, transporting, and delivering the actual product sold, plus a reasonable profit.”

The prohibition on charging excessive prices applies to all sellers of merchandise, including social media sites. Sellers who accept excessive prices on online auction sites are not exempt from Iowa’s price-gouging law.

Businesses or individuals found in violation of Iowa’s price-gouging rule could face civil penalties of up to $40,000 under the Iowa Consumer Fraud Act.

In the latest lawsuit, the Attorney General asks a judge to order a temporary and permanent injunction to stop Brenda Noteboom from selling household merchandise on any platform. It also seeks consumer restitution or disgorgement and civil penalties.

According to the lawsuit and an affidavit:

While investigating sales by Michael Noteboom, an investigator with the Consumer Protection Division discovered sales by eBay seller bnoteb2052. On March 26, the office sent the seller a written warning through eBay. The seller was later identified as Brenda Noteboom.

On April 29, the office sent a cease and desist letter to Brenda Noteboom and demanded information, including dates and prices at which she obtained the items she sold on eBay, as well as her actual costs of selling the more than 320 items, as well as any refunds she made, on forms proscribed by the Attorney General’s office.  Noteboom did not comply with the request for information.

Examples of the items Noteboom sold on eBay: A four pack of Charmin Ultra Soft toilet paper mega rolls for $44; a six pack of Bounty paper towel for $45; a five pack of Equate flushable wipes for $35, and Germ-X Hands Sanitizer 33.8-ounce pump bottle for $37.99.