3M (NYSE:MMM) announced that it filed a legal action in federal court alleging that a seller on Amazon inflated prices of fake, defective and damaged N95 masks.
N95 masks have been in high demand as the COVID-19 pandemic roars on. In April, the U.S. Defense Dept. awarded a $76 million contract to 3M to produce the respirators under the Defense Production Act (DPA) and the company announced two more DoD contracts last month.
The lawsuit alleges that Mao Yu and affiliated companies defrauded customers by charging the inflated prices for the fake and damaged respirators, falsely advertising as third-party sellers under the 3M brand. The company alleges that the defendants charged unsuspecting customers more than $350,000 when they responded to false listings claiming to be selling authentic N95 masks.
3M’s allegations state that the defendants charged prices that exceed as much as 20 times the list prices for 3M’s N95 respirators. Amazon learned that the defendants misrepresented what would be delivered and the buyers received non-3M respirators, fewer items than purchased, products in suspect packaging and defective or damaged items.
Amazon has blocked the accounts of Mao Yu and affiliated companies, while 3M seeks both monetary damages and injunctive relief to require the defendants to cease their unlawful activity. 3M plans to donate any damages recovered to COVID-19-related nonprofit organizations.
“There is no place for counterfeiting or price gouging on Amazon and we’re proud to be working with 3M to hold these bad actors accountable,” Amazon VP of customer trust & partner support Dharmesh Mehta said in a news release. “Amazon has long-standing policies against counterfeiting and price gouging and processes in place to proactively block suspicious products and egregious prices. When we find a bad actor violating our policies, we work quickly to remove the products and take action on the bad actor, as we’ve done here, and we welcome collaboration from brands like 3M.”
3M said in the release that its prices for the respirators remain unchanged as a result of the pandemic. The company has already filed more than a dozen lawsuits against fraud, price gouging and counterfeiting, winning five temporary restraining orders and four preliminary injunction orders.
So far, 3M has secured the removal of more than 3,000 websites with fraudulent or counterfeit product offerings, more than 4,000 deceptive social media posts and more than 100 deceptive internet addresses. Its internal and external litigation team is fighting the legal battles, with Norton Rose Fullbright’s Kevin Mayer and Andrea D’Ambra, plus Christopher Weimer of Pirkey Barber leading the charge in the case against Mao Yu and affiliates.
“3M customers deserve authentic products at fair prices, and this scam is aimed at exploiting the demand for our critical products during the pandemic using 3M’s name connected with price gouging and counterfeiting,” 3M senior VP of corporate affairs Denise Rutherford said. “Our collaboration with Amazon is one of the important ways we are working to prevent and combat fraud, and we will report this unlawful activity to law enforcement, as well.”