Cheat Sheet: Post-Sandy Price Gouging

In wake of Hurricane Sandy, you may have seen gas prices spike outrageously high or have cab drivers charge you $40 dollars for what would normally be a $15 ride. This is called price gouging and while some argue it’s the laws of supply and demand – others agree that it teeters on the border of unethical.

What is it?

  • When pricing is increased above the market price when no alternative retailer is available. This is especially true during natural disasters, when food, gas, and other supplies become increasing limited.

What the States are saying:

  • Seven of the 13 East Coast states hit by Sandy have laws against price gouging.
    1. New Jersey: forbids price hikes of more than 10 percent in an emergency.
    2. New York: prohibits sellers of "essential consumer goods and services from charging excessive prices during what is clearly an abnormal disruption of the market."
    3. Connecticut: forbids "individuals from excessively hiking up the prices of products and services during severe weather events."
    4. North Carolina: gouging is defined as “a price that is unreasonably excessive under the circumstances.
    5. Massachusetts: gouging is described as “a gross disparity between the price charged and price at which similar products were sold immediately before the emergency."
    6. Maine: any “unjust or unreasonable profit” in the sale or exchange of necessities is illegal.
    7. Virginia: it is up to courts to determine whether the price charged for a product is significantly higher for the same/similar items in the 10 days prior to an emergency.
  • And of the 30 states that have laws regulating gouging, there is a specific level of increase – either 10 or 25 percent.

Where price gouging is being applied post Sandy:

  • Some gas stations have raised their prices by 20 to 30 percent.
  • Certain hardware stores are charging twice as much for electric generators post Sandy.
  • There are reports that car rental prices jumped from $15 a day to $230 at Baltimore’s main airport when flights were grounded.
  • Before the storm midtown Manhattan hotel rooms went for $269 a night – after Sandy it increased to $679 a night, according to NBC News staffers booking rooms.
  • Convenient stores, cabs, dining, and storage units are among those seeing increasing prices post Sandy.

Consumer Affairs has set up a hot line to report price gouging. Call 1-800-242-5846 to report it!

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