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

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.