The Buy Safe America Coalition released a statement calling on the Federal Trade Commission (FTC) to launch an investigation into stolen baby formula and price gouging on online marketplace platforms amid a nationwide shortage of formula.
“The ongoing baby formula shortage has led to scores of desperate parents turning to e-commerce platforms in the hopes of finding products for their families—and in some cases, they are buying product that has been stolen from the shelves of their local retailer,” said Michael Hanson, Buy Safe America Coalition spokesperson, in the statement. “Much like the price gouging that occurred with critical PPE at the onset of the COVID-19 pandemic, the same is now happening with baby formula sold online. Many law enforcement officials have recognized this reprehensible activity for what it is, vowing to crack down on criminals looking to profit off desperation. This crisis only underscores why we need greater transparency on e-commerce marketplaces, so that criminals cannot hide behind fake screennames to fleece consumers—in this case, desperate parents.
“As the president invokes the Defense Production Act to boost domestic production, the FTC should immediately launch an investigation to determine the scope of illegal activity driven by this crisis.”
Families should exercise caution when purchasing infant formula on online marketplaces such as Amazon. Organized retail crime rings have been known to use third-party platforms to sell stolen baby formula to unwary shoppers. According to the Congressional Research Service, the theft and resale of stolen consumable or health and beauty products poses serious risk to consumers since these products may have been stored improperly or subjected to altered expiration dates. A previous CNBC investigation revealed that Amazon sells expired baby formula.
Learn more about organized retail crime in LPM‘s ORC Special Issue.
The INFORM Consumers Act would require third-party marketplaces to verify high-volume third-party sellers, addressing the online sale of stolen and counterfeit merchandise. The bipartisan legislation, which passed in the U.S. House in February as part of the America COMPETES Act, has attracted broad support from retailers, e-commerce platforms, law enforcement officials, manufacturers, and consumers.