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New York Officials Work to Curtail Price Gouging

  • Peter Fedynsky

In the wake of Superstorm Sandy, consumers in New York are complaining about having to pay more for services than they would normally. The New York State Attorney General's office is investigating accusations of price gouging. State officials are highlighting the issue to deter gougers from preying on victims of the storm.

“This is a different day, my friend.” That’s what a cab driver recently said when this reporter protested his attempt to charge $30 for what would usually be a $10 ride.

A spike in demand for taxis, generators, batteries, hotel rooms and gasoline during and after last week's storm prompted a few vendors to charge exorbitant prices for goods and services.

Al Ridolfo, a hotel manager, says some of his competitors charged $800 for a $300 room. And he paid $25 for an $8 set of radio batteries.

“There are just these few businesses. They see money, their eyes go wild - dollar signs in their eyes," he said. "And it’s really bad. It’s bad for the city; it’s bad for the other businesses”

The attorney general says several hundred cases of price gouging have been reported since the storm hit New York state, which has a total population of more than 19 million people.

New York University law professor Eleanor Fox says that is a small percentage. Prosecutors intend to keep it that way.

“In the very extreme cases, where you look at the law and you look at what was done, and you know that person did wrong, the person will probably want to settle," she said. "So, assume the person settles, the attorney general would want to issue press releases and make a very big deal about the fact that this is happening and it is wrong.”

One private online Craigslist ad offers gas at $15 per four liters, more than triple the usual price. Fox says reselling goods at a higher price is not considered gouging. But retailers are prohibited from charging what the law refers to as “an unconscionably excessive price.” The penalty for doing so is a fine of up to $25,000 and, where appropriate, restitution to aggrieved consumers.

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