LANSING, MI (WKZO AM/FM) — Attorney General Dana Nessel is continuing her crackdown into cases of scams and price-gouging during the COVID-19 outbreak.
The latest company to come under fire is Grand Rapids-based importer Kooz Concepts International Inc., which is the subject of a consumer complaint of price-gouging practices. The company was reported by Battle Creek-based grocer Penny Pinchers.
In response, Dana Nessel’s office is issuing court-authorized subpoenas in its investigation of Kooz Concepts. The subpoenas will be used to investigate their business practices through sales records and other documentation, as well as testimony from Kooz Concepts’ employees engaged in the company’s operations.
Other related entities identified during the investigation will be reviewed as well.
Kooz Concepts is likely in violation of the Michigan Consumer Protection Act for causing confusion among customers about its goods, specifically face masks, which have become highly sought products during the COVID-19 pandemic.
Penny Pinchers had posted on social media that it was selling N-95 face masks for $3 apiece. The masks sold were basic surgical masks and not N-95s. Certain masks advertised as N-95s may be imported counterfeits and not actually carry that official designation or offer the same level of protection.
The Centers for Disease Control and Prevention (CDC) has information available on how to distinguish between legitimate respirators and counterfeits.
“As my office becomes more aware of counterfeit masks being marketed and sold as products that offer more protection than they actually do, there is a growing demand for consumers to take their own precautions to make sure the equipment they are buying is not a knock-off,” Nessel said in a statement. “As Michigan works through our COVID-19 situation, scammers and con-artists will attempt to dupe unsuspecting victims into buying lower-grade, poorer-quality products under the false promise of security and protection from this virus. They are putting lives at risk, and they will answer for such lawlessness.”
Investigators with the Attorney General’s office believe the owner of Penny Pinchers was under the assumption that he purchased true N-95 masks, saying that he sourced the product from Kooz Concepts because of customer demand. The boxes of masks had “N95” markings on them.
Nessel’s office says that the owner of Kooz Concepts, Kraig Koeze, told investigators that his business typically imports Chinese products that are sold at trade shows, and that a family member who works in health care asked him to use his connections due to a desperate need for PPE (Personal Protective Equipment).
Koeze said he obtained the “basic 3-ply masks” from a “reliable source” in January and provided questionable documentation alleging the source is certified by the Food and Drug Administration (FDA). He also told investigators that his interpretation was the masks he sold are KN-95s and not N-95s, though didn’t have a clear explanation for why the boxes sold to Penny Pinchers were marked as N-95s.
Furthermore, Koeze told investigators that, in addition to Penny Pinchers, he sold masks to other businesses, including nursing homes and a fast-food restaurant. He declined to provide additional details on those purchasers until served with a subpoena requiring identification of those businesses.
Kooz Concepts then provided that information, and Attorney General staff began reaching out to the small number of affected businesses to make sure they understood the masks are not N-95s.
The Attorney General’s office says it is critical for consumers to exercise caution when purchasing products like PPE and educate themselves by visiting reliable websites like the CDC’s, and learning of what others are saying about a company or website through the Better Business Bureau.
As of 7 a.m. Monday, there have been 3,731 COVID-19-related price-gouging complaints made to the Attorney General’s office since early March.
Consumers can file a complaint online or by calling the Consumer Protection tip line, 877-765-8388. Hours of operation are between 8:30 a.m. and 4:30 p.m. Monday through Friday.
Exhibits in this case can be viewed online at this link.
This is only the latest business to come under fire in regards to selling masks. Last week, a Wyoming-based business came under fire for selling possible counterfeit masks to Michigan consumers through drop-shipping tactics.
