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Thursday, May 23, 2024 | Back issues
Courthouse News Service Courthouse News Service

Hurricane Price-Gouging Reported in New York

MANHATTAN (CN) - Citing hundreds of complaints, the New York Attorney General's Office opened an investigation into post-Hurricane Sandy price gouging.

Tens of thousands are still without power in the state after the storm tore through the Northeast in late October.

Attorney General Eric Schneiderman said he warned area vendors before the storm against inflating the price of necessary goods and services, and that he instructed New Yorkers on how to avoid scams.

General Business Law prohibits charging more for essential items like food, water, gas, generators, batteries and flashlights, and services like transportation, during natural disasters or other events that disrupt the market.

The price-gouging law covers New York state vendors, retailers and suppliers, such as supermarkets, gas stations, hardware stores, bodegas, delis and cab drivers.

Despite the warnings, hundreds of New Yorkers complained that they ran into inflated prices in New York City, the Hudson Valley and Long Island, Schneiderman said.

He added that most of those complaints related to increased gasoline prices, but that consumers were also overcharged on food, water, generators and other emergency supplies. Some hotels also allegedly raised their rates amid "high demand."

New York's price-gouging law does not specifically define what constitutes an "unconscionably excessive price," and the complaints filed in the past few weeks might not meet the threshold for legal coverage, Schneiderman said.

Though a "before-and-after" price analysis could document price gouging, a merchant might be able to show that it had to charge more because it faced additional costs not within its control.

The law maintains that "a price may be 'unconscionably excessive' if: the amount charged represents a gross disparity between the price of the goods or services which were the subject of the transaction and their value measured by the price at which such consumer goods or services were sold or offered for sale by the defendant in the usual course of business immediately prior to the onset of the abnormal disruption of the market," according to the attorney general's office.

It "prohibits a 'gross disparity,' when it is clear that a business is taking unfair advantage of consumers by charging unconscionably excessive prices, and increasing its profits, under severe circumstances that call for shared sacrifices," Schneiderman added.

He urged consumers to continue reporting ostensibly suspicious pricing by calling the attorney general's office at 1-800-771-7755 or complaining online.

New Yorkers also received a warning about avoiding scams related to home repair, clean-up services and tree removal.

The attorney general said consumers should not pay for such services with cash, nor should they pay the full price up front. It is also important to go over your insurance coverage, check the contractor's insurance and look into permit requirements. Check a potential contractor's references, address and licensing, and get the estimate in writing.

"Home improvement contractors are required by law to establish to an escrow account to hold the homeowners' un-disbursed funds when a contract is in excess of $500," according to the prosecutor's office. "Also, a homeowner has a three-day right to cancel a contract unless during an emergency, the homeowner has waived the three-day rule in writing."

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