For Immediate Release: November 29, 2012
A.G. Schneider Announces 12 More Enforcement Actions Against Gas Retailers In Post-Sandy Price Gouging Investigation
New Action Against 12 Gas Station Operators In New York City, Long Island & Westchester; NYS Law Prohibits Excessive Increases In Costs Of Essential Goods Like Food, Water, Gas, Generators, Batteries & Flashlights; Schneiderman: Our Ongoing Enforcement Means 25 Gas Retailers Will Be Held Accountable For Dramatic Price Increases
(New York, N.Y.) – Attorney General Eric T. Schneiderman today announced that his office has notified 12 gas station operators of his intent to commence enforcement proceedings against them for violations of the New York State Price Gouging statute in the wake of Hurricane Sandy. These are the latest actions in the Attorney General’s wide-ranging investigation of suspected gougers and it comes on the heels of hundreds of consumer complaints. Notification letters were sent to 13 gas stations earlier this month bringing the total number of targeted retailers so far to 25.
“Our office will continue to take enforcement actions against price gougers because ripping off New Yorkers is against the law,” Attorney General Schneiderman said. “We are actively investigating the hundreds of complaints we’ve received from consumers of businesses preying on victims of Hurricane Sandy. There must be no tolerance for unscrupulous individuals who take advantage of New Yorkers trying to rebuild their lives.”
The Attorney General said there will be other notifications coming as the investigation into consumer complaints continues.
Among the current batch of 12 enforcement targets is a Mobil station at 3424 East Tremont Avenue in the Bronx where a consumer waiting in line for over an hour was just three cars from the pump when she was told that she would be charged $50 for five gallons of gasoline – $10 per gallon. In contrast, stations nearby were charging $3.95 a gallon.
At a second station, the Coastal station at 1575 Route 112 in Port Jefferson Station, a consumer reported being charged $4.69 per gallon of gasoline while neighboring stations were charging between $3.69 and $4.05. One consumer waited in line for over an hour and did not see a sign detailing prices until after the attendant began pumping gas for the customer.
The stations receiving notices from Attorney General Schneiderman include the following twelve stations:
- Coastal, 1575 Route 112, Port Jefferson Station, NY 11776 – (Consumer Complaint: 4.69/gallon)
- BP, 1009 St. Route 109, Farmingdale, NY 11755 – (Consumer Complaints: $4.71/gallon)
- Liberty Petroleum, 1278 Hempstead Turnpike, Elmont, NY 11003 – (Consumer Complaint: $6.99/gallon)
- Ultra, 3300 Hempstead Turnpike, Levittown, NY 11750 – (Consumer Complaint: $4.89/gallon)
- Rio, 105 New Dorp Lane, Staten Island, NY 10306 – (Consumer Complaint: $4.89/gallon)
- Getty, 141-50 Union Turnpike, Flushing, NY 11367 – (Consumer Complaint: $4.99/gallon )
- Gulf, 60-90 Elliot Avenue, Maspeth, NY 11378 – (Consumer Complaint: $4.79/gallon (cash)/$4.89 (credit)
- Shell, 92-10 Astoria Boulevard, East Elmhurst, NY 11369 – (Consumer Complaints: ranging from $4.89-$7.90/gallon)
- Sunoco, 18-84 Flushing Avenue, Ridgewood, NY 11385 – (Consumer Complaint: $7.25/gallon)
- Mobil, 3424 East Tremont Avenue, Bronx, NY 10465 – (Consumer Complaint: $10/gallon)
- Mobil, 80 Bedford Road, Katonah, NY 10536 – (Consumer Complaint: $4.79/gallon)
- Mobil, 189 Route 59, Spring Valley, NY 10977 – (Consumer Complaint: $4.65/gallon)
The above prices are each for regular gasoline.
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.” 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.
Today’s actions are based upon a review of both consumer complaints and independently-gathered pricing information.
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 which 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.
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.
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: www.ag.ny.gov