New York State Attorney General Eric Schneiderman has opened an investigation into post-Hurricane Sandy price gouging following hundreds of complaints from consumers in hurricane-ravaged portions of the state.
General business law statutes in the state prohibit merchants from taking unfair advantage of customers by selling essentials such as food, water, gas, generators, batteries and flashlights at “an unconscionably excessive price” during natural disasters or other incidents that cause an unnatural disruption in the market.
“Our office has zero tolerance for price gouging,” Schneiderman said in a statement issued by his office last week.
“We are actively investigating hundreds of complaints we’ve received from consumers of businesses preying on victims of Hurricane Sandy, and will do everything we can to stop unscrupulous individuals from taking advantage of New Yorkers trying to rebuild their lives,” he added.
Schneiderman said he sent out a price-gouging warning prior to the storm to businesses such as supermarkets, gas stations, hardware stores, bodegas, delis and taxi and livery services in areas lying in Sandy’s projected path.
A source familiar with the investigation told the Queens Chronicle that there have been about 600 complaints as of the end of last week, the majority of which involve gas stations.
While not commenting on the specifics of the investigation, the AG’s office said it also has received complaints about generator and hotel rates rising due to “high demand” and increased prices for food and water
The complaints have come from New York City, Long Island and the Hudson Valley.
The source also said Schneiderman’s investigators have subpoenaed information from Craigslist, and have contacted some people posting goods and services on the online classified website at questionable prices.
Schneiderman’s statement said some businesses targeted in a preliminary inquiry have been put on notice by his office.
While the state’s price gouging statute, General Business Law 396-r, does not specifically define what constitutes “an unconscionably excessive price,” the law says it can include “a gross disparity” between prices on essential goods or services before and immediately after the disruption of the market.
“In other words, ‘before-and-after’ price analysis can be used as evidence of price gouging,” Schneiderman stated.
The law does not prohibit any and all price increases following a market disruption, and merchants are permitted to present evidence that additional costs not within their control were imposed upon them, as opposed to someone who clearly “is taking unfair advantage of consumers.”
Schneiderman said consumers may file complaints by calling his office at 1 (800) 771-7755, or by logging onto his office’s website at ag.ny.gov