Price Gouging

 

New York State’s Price Gouging Law (General Business Law § 396-r) 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," which would include Hurricane Sandy. 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. 

New York's price gouging law takes effect only upon the occurrence of triggering events that cause an "abnormal disruption of the market." An "abnormal disruption of the market" is defined as "any change in the market, whether actual or imminently threatened," that results from triggering events such as "weather events, power failures, strikes, civil disorder, war, military action, national or local emergency, or other causes." During an abnormal disruption of the market like Hurricane Sandy, all parties within the chain of distribution for any essential consumer goods or services are prohibited from charging unconscionably excessive prices. “Consumer goods” are defined by the statute as “those used, bought or rendered primarily for personal, family or household purposes.” For example, gasoline, which is vital to the health, safety and welfare of consumers, is a "consumer good" under the terms of the statute. Therefore, retailers may not charge unconscionably excessive prices for gasoline during an abnormal disruption of the market.

New York's price gouging law does not specifically define what constitutes an "unconscionably excessive price." However, the statute provides that a price may be "unconscionably excessive" if:  the amount charged represents a gross disparity between the price of the goods or services that were the subject of the transaction and their value measured by the price at which such consumer goods or services were sold or offered for sale by the vendor in the usual course of business immediately prior to the onset of the abnormal disruption of the market. 

In other words, a "before-and-after" price analysis can be used as evidence of price gouging. Evidence that a price is unconscionably excessive may also include proof that "the amount charged grossly exceeded the price at which the same or similar goods or services were readily obtainable by other consumers in the trade area." However, a merchant may counter with evidence that additional costs not within its control were imposed for the goods or services. Notably, the price gouging law does not prohibit any disparity between the price charged before and after there is an abnormal disruption of the market. Rather, the statute prohibits a "gross disparity," when it is clear that a business is taking unfair advantage of consumers by charging unconscionably excessive prices, and increasing its profits, under severe circumstances that call for shared sacrifices.

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

http://www.ag.ny.gov/price-gouging-complaint-form

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