The charity watchdog is investigating after a faith healer allegedly offered £91 "plague protection kits" for sale to protect people from the coronavirus pandemic.
The Charity Commission opened a case after Bishop Climate Wiseman said the small bottle of oil and piece of red yarn would shield his followers from the deadly virus.
In a blog post, the head of the Kingdom Church in Camberwell, south London, claimed his concoction of cedar wood, hyssop and scarlet yarn acts as "an invisible barrier to the powers of darkness".
He wrote: "It is by faith that you can be saved from the coronavirus pandemic by covering yourself with the divine plague protection oil and wearing the scarlet yarn on your body.
"That is why I want to encourage you, if you haven't done so already, to get your divine plague protection kit today!"
Bishop Wiseman told the PA news agency the church, which is a registered charity, had sold more than 1,000 of the kits, which were originally priced at £91, according to media reports.
The link to buy them has since been deactivated following criticism from Southwark Council.
The Charity Commission, which regulates charities in England and Wales, said on Thursday: "We are looking into the serious concern about Kingdom Church GB's alleged sale of false Covid-19 protection devices, as a matter of urgency.
"We have opened a regulatory compliance case to assess the matter and will be liaising as appropriate with other agencies.
"Charity can and should lead the way in taking public expectations seriously and charity leaders should demonstrate high standards of conduct and behaviour."
A National Secular Society spokesman welcomed the commission's response but called for reform of charity law.
"Selling bogus protection kits during the current crisis is worse than useless; it's exploitative and potentially harmful," he said.
"We must also question the current legal assumption that advancing religion is inherently beneficial. In this case, the very opposite appears to be true."
The plague protection kit is one of many anointing oils offered by Bishop Wiseman for a range of problems, including oil for peace, unlimited success oil and anointing oil for good marriages.
On the Kingdom Church's website, it claims thousands of people have been healed from "all sorts" of sickness and disease since it was founded in 2005.
Bishop Wiseman has previously insisted the church is not selling the kits and that the price tag was just to cover the cost of the ingredients, yarn and postage and packaging.
He said his church was not telling people to ignore the Government's advice, adding: "This is based on the Bible - I'm a Christian and there is a way that the Bible says to protect us from plagues.
"I have not told anybody to get out of your house, go anywhere or whatever."