Colorado AG accuses medical supply company of misleading claims, price gouging

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DENVER (KDVR) — Colorado Attorney General Phil Weiser reached a settlement agreement with Denver-based Nationwide Medical Supply, Inc. following allegations the company engaged in deceptive sales tactics and price gouging during the early days of the COVID-19 pandemic.

Nationwide sells masks and respirators. In April of 2020, investigators from Weiser’s office started focusing on Nationwide—a company that advertises on FOX31.

“What happened here is unreasonable,” Weiser told FOX31. “It’s not justifiable to gouge someone to the extent that happened here.”

Nationwide is a relatively new company. Its lawyer, Alan Schindler, told FOX31 the company was founded in March of 2020 and staffed by salespeople who were about to be laid off due to the pandemic. Weiser’s office alerted Nationwide it was under investigation shortly after the new company started selling product.

“We invited the investigators in,” Schindler said. “They came in. They met with the whole staff.”

Investigators found marketing issues such as a KN95 mask advertised as an N95 respirator. Also, they found false claims that products were FDA approved, according to Weiser’s press release.

“Nationwide would copy the information that they received from suppliers or distributors and include that on their website,” Schindler said.

The company acknowledged it did not verify claims from its sellers. But Schindler said Nationwide never intentionally misled anyone. Weiser said Nationwide, in some cases, had 250% mark-ups on product.

“Nationwide had considerable overhead as a brand new business,” Schindler said.

But Weiser insisted the company’s pricing was way off, at the time, compared to its competitors.

“The critical question is are you pricing way out of step with other reasonable sellers in the marketplace,” Weiser said.

Nationwide said it feels unfairly targeted. Weiser said the case is about making sure Coloradans are not taken advantage of.

“I believe this company is learning its lesson, and I believe this case tells other people that we take these issues seriously,” Weiser said.

During Weiser’s investigation, his staff submitted two masks for testing. Both masks were advertised at 95% filtration levels. One was verified as advertised. The second mask resulted in roughly 70% filtration. Nationwide said Weiser’s office sat on the test results for about four months instead of immediately informing Nationwide of the issue so the company could stop selling the less protective masks. Weiser’s office sent the following response to that criticism:

“The sellers of a product have a legal responsibility to assure the product is as represented. The Attorney General’s Office is responsible for enforcing consumer protection laws for the entire state. Our office took the appropriate legal steps to protect consumers and see that this company acts responsibly going forward.” – Colorado Attorney General spokesperson.

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