Asbury Park Press

Price Gouging: Pallone Bill Would Get Feds Involved After Disasters

Asbury Park Press — November 3, 2017

By David P. Willis

In the days before and after superstorm Sandy five years ago, some businesses didn't do the right thing.

For instance, one gasoline station allegedly charged as much as $5.09 per gallon for premium gas, a 34.2 percent increase from rates prior to Gov. Chris Christie's declaration of a state of emergency in the days before Sandy hit.

One hotel raised room rates by up to 208 percent following the storm, charging $219 for a room that was just $71.20 before the storm.

After a devastating storm, price gouging just sucks away your will and energy, not to mention the little cash you have. And in the wake of recent hurricanes that have devastated communities in Texas, Florida and Puerto Rico, it's happening again.

Earlier this week, Texas officials sent notices of violation to 127 Texas businesses accused of price gouging, namely gas stations that allegedly charged $3.99 or more for unleaded regular or diesel. Florida officials have received more than 14,000 price gouging complaints related to Hurricane Irma. Victims of Hurricane Maria in Puerto Rico have reported price gouging on items such as prepared food and water.

U.S. Rep. Frank Pallone, D-N.J., put the legislative spotlight on price gouging this week.

In Long Branch, Pallone unveiled legislation to combat price gouging after a public disaster. The law, he said, would give the Federal Trade Commission and states the teeth to go after businesses that excessively raise prices after an emergency declaration by the president.

"With this legislation, I hope to send a clear signal that the types of abuse we saw after Sandy will face the full force of the FTC," Pallone said.

New Jersey already has taken a tough stance against price gougers. State law prohibits price spikes of more than 10 percent during a declared state of emergency or for 30 days after it ends.

After Sandy, the state Division of Consumer Affairs filed lawsuits against 27 businesses, which settled them all to the tune of more than $1 million in civil penalties.

New Jersey "could be seen as sort of an example at what we're trying to do," Pallone said. Some states don't have the laws to crack down on gougers like the Garden State does, he said.

"For New Jersey, (this proposed legislation) is more of a backup," Pallone said. It will give the state's residents another place, the Federal Trade Commission, to report price gougers. And the federal government can pursue a case if a state doesn't have the manpower, or the will, to do it itself.

Pallone said the House Committee on Energy and Commerce, of which he is ranking member, will take up bill, titlled the STAND UP Act of 2017. STAND UP stands for Stop Targeting Americans In Natural Disasters with Unconscionable Prices.

It will:

"The unconscionable price gouging that goes on during natural disasters is something that we as a society should be pretty concerned about," said Beverly Brown Ruggia, financial justice advocate and organizer for New Jersey Citizen Action, a consumer group.

These days, a priority seems to be placed on the rights of businesses, such as big banks or credit reporting companies, she said. (Just last month, the Senate overturned a rule by the Consumer Financial Protection Bureau that allowed consumers to file class action lawsuits against banks and credit card companies.)

"We are at a clear disadvantage," Brown Ruggia said. "It is certainly despicable to think that companies would even think of price gouging or abusing people when they are literally in the streets and sometimes on their knees and very often in hospitals."

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