WASHINGTON, D.C. — Two online sellers promised fast delivery of in-demand face masks, sanitizers, gloves and other personal protective equipment. Instead, they left people waiting weeks, or even months, before sending them out.
On Monday, the Federal Trade Commission (FTC) announced that it won two lawsuits against companies that failed to deliver on orders of personal protective equipment (PPE) in the early stages of the COVID-19 pandemic. As part of the victory, the companies were ordered to stop selling these products and provide refunds to consumers.
The FTC said that QYK Brands and American Screening, LLC, deceived people about the availability of PPE gear. At the time, QYK Brands was doing business as Glowyy and other related companies.
The brands marketed and sold PPE including masks, face shields, hand sanitizer and gowns. American Screening marketed the products in bulk, targeting private buyers, local governments, hospitals and nursing homes. Glowyy targeted private buyers.
The FTC said Glowyy began advertising hand sanitizer and PPE in March 2020, saying they were in stock and would ship the same day. However, they repeatedly failed to make good on these promises. The U.S. District Court for the Central District of California found that not only did they fail to actually ship the product for weeks or months, but they failed to offer refunds to consumers or allow them to consent to the delay as required by the Mail Order Rule.
Under the Mail Order Rule, at the time sellers solicit an order, they must have a reasonable basis they will be able to ship:
1) within the stated time; or
2) if no time is stated, within 30 days. If a shipment is delayed, the Rule lays out sequential if-then steps sellers must take to ensure buyers aren’t left in the lurch.
One key consumer protection built into the Rule is that if sellers can’t ship within the required time, they must send a shipping delay notice that offers the buyer a choice either to consent to wait or to cancel the order and get a prompt refund.FTC on Mail Order Rule
The FTC said that at the start of the COVID-19 pandemic, American Screening’s website claimed that items would be shipped within 24-48 hours and that products were in stock and available to ship. However, the U.S. District Court for the Eastern District of Missouri said the company did not have a reasonable basis for its shipping claims, failed to ship many orders within the promised time period, and did not follow the Mail Order Rule’s requirements for delayed shipments.
The court has already entered an injunction into the Glowyy case. The FTC said this requires Glowyy to:
- Stop selling products that purport to treat COVID-19. The order prohibits the Glowyy defendants from selling or marketing any good or service that claims to prevent, treat, or protect against COVID-19 or any other infection or disease.
- Stop misleading consumers about the timing of product deliveries. The order requires the company ship products in a timely manner, offer a refund if they are unable to do so, among other things. The company must create and maintain records demonstrating its compliance with these requirements
- Stop making unsubstantiated health claims. The order prohibits Glowyy from making unsubstantiated health claims about any dietary supplement, food or drug.
- Provide refunds to consumers. Glowyy must surrender $3.08 million to the FTC to be used for providing to refunds to consumers.
In the American Screening case, the court agreed with the FTC that both monetary relief in excess of $14 million and injunctive relief are appropriate. The FTC will submit a proposed order in the coming weeks.
The FTC is encouraging people to take precautions before ordering from an unfamiliar store. They provided the following advice:
- Check out the company or product by typing its name in a search engine with terms like “review,” “complaint,” or “scam.” See what other people say about it.
- Confirm the terms of the sale. Calculate the total purchase price, including taxes, shipping, and handling. If you have to return the item, can you get a refund? Who pays for return shipping? Is there a restocking fee?
- Pay by credit card. That gives you protections under federal law. If a business charged your account too soon, and didn’t deliver the merchandise on time, you can file a dispute and report it to your credit card company.
If someone suspects a scam, they should let the FTC know at ReportFraud.ftc.gov.