NY State Probes Post-Hurricane Sandy Gas Price-Gouging Complaints

Attorney General says complaints are coming in from across the state.

New York State is investigating post-Hurricane Sandy price gouging after receiving hundreds of complaints from consumers across the state, according to Attorney General Eric T. Schneiderman

Before the storm made land fall, the Schneiderman issued an open letter to vendors in areas forecast to be affected by Hurricane Sandy to warn against price gouging, the inflation of the price of necessary goods and services. Schneiderman said General Business Law prohibits such increases in costs of essential items like food, water, gas, generators, batteries and flashlights, and services like transportation, during natural disasters or other events that disrupt the market.

"Our office has zero tolerance for price gouging," said Schneiderman. "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." 

New York State’s Price Gouging Law prohibits merchants from taking unfair advantage of consumers by selling goods or services for an "unconscionably excessive price" during an "abnormal disruption of the market." The price gouging law covers New York State vendors, retailers and suppliers, including but not limited to supermarkets, gas stations, hardware stores, bodegas, delis, and taxi and livery cab drivers.  

Schneiderman said he has received hundreds of complaints from consumers from New York City, the Hudson Valley and Long Island. While the largest number of complaints related to increased gasoline prices, consumers contacted the Attorney General to report possible gouging for emergency supplies like generators, hotels raising rates due to "high demand," as well as increased prices for food and water.

Schneiderman noted that these complaints might not meet the threshold for coverage under New York's gouging statute, but encouraged consumers to contact his office to report anything that appears suspicious. 

Concerns of price gouging also led Westchester and Rockland counties to send inpectors out last week to check on gasoline prices and to ensure gas stations were abiding by pricing rules and regulations.

"Our office is taking every complaint seriously," Schneiderman said. "Staff from regional offices across the state are triaging and acting on consumer complaints as they come in. We have contacted the targets as part of a preliminary inquiry and vendors are now on notice. While most retailers understand that customers are also neighbors, and would never think of taking advantage of New Yorkers during such disruptive times, emergency circumstances always require an extra sense of vigilance."  

Schneiderman urged New Yorkers to call his office at 800-771-7755 or log on to his office’s website to make a complaint.  

In addition to urging New Yorkers to remain vigilant against potential price gouging as we continue the rebuilding process, Schneiderman also issued tips on how to avoid scams related to home repair, clean up services and tree removal: 

•  Never pay cash, and don't pay the full price up front. Establish a payment schedule and adhere to it. Withhold final payment until the entire project is completed to your satisfaction and all required inspections and certificates of occupancy are finalized.

•  Check with your insurance company. Before making any decisions, be clear about what will be covered and any steps you will need to take.

•  Ask for references, check for licenses. Ask about local work contractors have done. Talk to the people who hired them; look at the jobs if you can. Make sure the contractor has any license required by your local government.

•  Estimates are important: get it in writing. Ask that all estimates for work be in writing and include a description of the material to be used. Be clear that you will not pay for work done that is not agreed upon in writing. Verify that the material used is the same as described in the estimate. Make sure any changes to the estimate are in writing.

•  Know your rights. 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. 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.

•  Use a contractor with an address you can verify.  If your contractor is “here today and gone tomorrow,” you may find it difficult to enforce the guarantee.

•  Always be sure the contractor has valid insurance. If a worker is injured, or damage is caused on your property, you could be held liable if your contractor does not have the required insurance.

•  Check with your town or city for required permits. Don't let a contractor work without the necessary permits. Failing to get approvals can delay your project, or prevent you from occupying a completed building.

If you believe you are a victim of price gouging or a post-hurricane scam, contact the Attorney General’s Consumer Helpline at 800-771-7755 or find a complaint form online at: www.ag.ny.gov.

Bill November 05, 2012 at 05:36 PM
I just called the Westchester DCA and reported the Shell and Mobil stations in Yorktown Heights (both $4.49 yesterday, over 40 cents higher than they were last week) and Shells on Routes 6 and 202 in Cortlandt Manor, which were $4.79 on Saturday (the one on 6 was almost a dollar less last week). The great thing is that with all the gas price search engines out there, you can easily tell what the prices were a few days ago, so proving the gouging accusation is simple.
SPK November 05, 2012 at 07:09 PM
As of Monday afternoon, Cortlandt stations were all open and no lines. Hopefully, that's behind us I would suggest there is no such thing as gouging during a shortage...prices adjust and we are free to go to the next station
Tim November 05, 2012 at 08:05 PM
It's not gouging if there is a legitimate shortage and the wholesale prices increase (price stations pay for their fuel). I guess people like "Bill" above, expect retail stations to sell their fuel at a loss. "Bill" should be happy he can find gas and be happy it's not over $5 a gallon as I was paying in California a little less than a month ago.
Mark Fitzpatrick November 05, 2012 at 08:13 PM
Westchester County has been declared a disaster area.. It is price gouging
Bill November 05, 2012 at 08:34 PM
Tim, where is there proof that the gas station's costs went up? Hess on 202 was still under $4 and other stations on 6 were also under $4. I doubt the gas companies would have had the balls to raise prices to stations (40c+/gallon) on their own because they know they would have gotten flack from the politicians. And I'm not the only one who's calling it price gouging. The Westchester Department of Consumer Affairs (DCA) asked people to call if they spotted it. It's in another thread here.
Bill November 05, 2012 at 08:53 PM
Also, the woman I spoke to at DCA already had a complaint from someone on the Yorktown stations.
Tim November 05, 2012 at 09:44 PM
Bill, it's not unusual for the prices to vary like this. I would guess that during this shortage wholesale prices have increased. If a station that just got its power back on is selling what was in its tanks before the storm, their retail prices would be lower than a station that just received a delivery at a higher wholesale price. You can complain to DCA all you want, but the station has receipts for their deliveries, and they are allowed to increase their retail prices accordingly. They are not expected to sell at a loss to you just to make you happy. And, just because other economic illiterates have called the County DCA as well, doesn't mean there is gouging taking place.
Billy November 05, 2012 at 11:01 PM
What about the station on the hutch? He's over $5. That's gouging.
Erkme73 November 06, 2012 at 12:23 AM
Think this through folks... Anti-price gouging laws are nothing more than price fixing. You want ample supply? Get rid of these laws. If a gas station owner can charge $40/gallon, guess what happens? Gas station owners in other states will personally drive their gas to the hurting areas. That will boost supply, and in turn, cause downward pressure on prices. Supply/demand. Capitalism in its purest form. On the flip side, if you force sellers to keep prices low (or provide gas for free courtesy of DoD), you get exactly what we see - shortages. No one wants to bring gas into an area where they can sell it without risk and hassle in their non-affected local area. Politically it looks good to say you want to stop gouging, but free-market will always regulate the best. It's a shame people are so brainwashed to think price-fixing is a fix.
Bill November 06, 2012 at 03:01 AM
Tim. feel free to keep making excuses. I think it's very unlikely that you're correct about the lower prices at some stations being due to gas that was already in their tanks before the storm. I know for a fact that Hess on 202 in Cortlandt Manor had gas on Wednesday because a friend whose house we were squatting at when our power was out said that they had gas when he drove past that night, and I saw them sub-$4 on Saturday, and there is no way you can tell me that they had not sold out of the Wednesday gas by then. Meanwhile my daughter just came home from White Plains and drove in and out of one of the stations there that was $4.39 cash but $4.49 credit, and there was no line. Apparently the Sunoco in Jefferson Valley has gas also and there's no line. Their price has been reasonable all along.
SPK December 01, 2012 at 12:38 AM
The notion of price gouging during a shortage is an invention Let prices adjust and the temporary lines would have disappeared The people in greatest need would have gotten gas at a higher price I'd like to see this stupid law go away
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