Texas AG to investigate price gouging

Drew Smith Sep. 16, 2008, 10:00am

AUSTIN(Legal Newsline) - Much like several of his colleagues, Texas Attorney General Greg Abbott has launched an investigation into price-gouging after his office received hundreds of complaints from consumers in the wake of Hurricane Ike.

The complaints allege consumers were charged inflated prices for necessities such as food, water, power generators and hotel lodging -- a crime under Texas Deceptive Trade Practices Act. Texas law does, however, allow retailers to pass along wholesale price increases to customers.

Abbott's office claims he retains the authority to pursue the price gouging complaints because Texas Gov. Rick Perry's disaster declarations are still active.

Texas is not the only state dealing with price-gouging complaints. Some states, ones arguably unaffected by the rain and wind of Hurricane Ike, have been dealing with similar accusations.

Connecticut Attorney General Richard Blumenthal is investigating what he calls "illegally unsupportable price hikes."

"Dozens of complaints by consumers -- likely to reach more than 200 by the end of the day -- concern a range of abuses that we will investigate and prosecute as facts warrant," Blumenthal said. "We will prosecute any price-gouger -- as we did after (Hurricane) Katrina, forcing more than 20 retailers to pay in excess of $100,000 in illegal, ill-gotten profits."

In North Carolina, Attorney General Roy Cooper issued subpoenas yesterday to seven gas stations that allegedly charged consumers $5.49 or more per gallon for gas. His Consumer Protection Division served the subpoenas after receiving more than 2,800 reports of gouging, which violated North Carolina General Statute 75-38.

"There's no excuse for ripping off consumers who are already hurting from high gas prices," Cooper said. "Gouging for greed will not be tolerated in North Carolina."

However, Mississippi Attorney General Jim Hood points out that while it may appear that merchants are price gouging, certain costs -- such as the cost of refining and transporting gasoline -- rise during a state of emergency. Under Mississippi law, merchants are permitted to increase their prices if they have incurred such additional costs.

"Based on the investigation of reports we have received thus far, it appears that retailers are in fact incurring increased costs in providing gas to consumers," Hood said. "We will, of course, continue to monitor and follow up on reports we receive."

Hood claims that if the owner of a gas station is making a certain profit margin prior to an emergency, that merchant has the right to adjust his or her profits in order to maintain that same margin.

Florida Attorney General Bill McCollum was scheduled to send out a round of subpoenas today.

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