NY Attorney General Tells Retailers They Can’t Just Go Around Inflating Prices Post-Sandy

As hundreds of thousands of East Coast residents pull together to offer up goods and services to those devastated by Hurricane Sandy, there are still plenty of businesses and individuals who are willing to make a buck off someone else’s misfortune. New York Attorney General Eric Schneiderman says his office has launched an investigation into claims of price gouging to go after anyone hiking prices on essential items like food, water, gas, batteries, accommodations and more.

Schneiderman says in a press release that his office has already gathered hundreds of consumer complaints that businesses are trying to take advantage of circumstances just to make a profit.

“Our office has zero tolerance for price gouging,” said Attorney General 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.”

There’s a state law against price gouging that prohibits merchants from taking unfair advantage of consumers by selling any good or services for an “unconscionably excessive price” during an “abnormal disruption of the market.”  Translation: “Just because a hurricane messed everything up doesn’t mean you can prey on the downtrodden.”

That law covers anything from retailers to vendors, supermarkets, gas stations, bodegas, delis, cabs and more. Most of the complaints that have come in are related to gas prices, but there’s also been reports of increased prices on hotel rates and emergency supplies.

Even if what consumers are experiencing isn’t covered by the state law, the AG’s office encourages people to report any suspicious activity by calling 800-771-7755 or on www.ag.ny.gov.

The price gouging law doesn’t lay out exactly what an “unconscionably excessive price” is, but using a simple comparison of “this cost X much before the storm and now costs Y” is an easy first step. Or if one store is charging say, $5 for something and another charges $15 for the same thing, something funny is likely going on.

The A.G.’s office also issued some tips on how to avoid scams in the wake of a natural disaster:

• 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: http://www.ag.ny.gov.