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Schneiderman warns against price gouging during major snow event in Western New York

by jmaloni


Tue, Nov 18th 2014 10:30 pm

Schneiderman warns against price inflation of necessary goods and services 

State law prohibits excessive increases in cost of essential goods including food, water, gas, generators, batteries and flashlights

Attorney General Eric T. Schneiderman today issued a consumer alert warning both consumers and businesses about price gouging during major weather events.

Today, a state of emergency was declared in the towns of Lancaster, Orchard Park and West Seneca. Heavy snowfall has occurred throughout the greater Buffalo and Western New York region. General business law prohibits excessive increases in prices of essential items such as food, water, gas, generators, batteries and flashlights, and services like transportation, during natural disasters or other events that disrupt the market. 

"The law is clear when it comes to price-gouging during emergency weather events, and our office will have zero tolerance for price gouging," Schneiderman said. "Consumers should report instances of price-gouging to our office, and businesses should understand that the law prohibits capitalizing on weather events to inflate prices."

New York state's price gouging law (general business law ยง 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." The price-gouging law covers New York vendors, retailers and suppliers, including but not limited to supermarkets, gas stations, hardware stores, bodegas, delis and taxi and livery cab drivers. 

Schneiderman urged New Yorkers to call his office at 800-771-7755 or log on to his office's website, www.ag.ny.gov, to file a complaint if they believe price gouging has occurred. 

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 a major weather event, all parties within the chain of distribution for any essential consumer goods or services are prohibited from charging unconscionably excessive prices. The statute defines "Consumer goods" 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 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 defendant in the usual course of business immediately prior to the onset of the abnormal disruption of the market. 

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