NEWARK – The Office of the Attorney General, the New Jersey Division of Consumer Affairs, and the New Jersey Division of Criminal Justice are reminding consumers about New Jersey’s price gouging law as the state faces its first major snowstorm of the year. Merchants and businesses that engage in price gouging in the State of Emergency relating to the storm will be punished to the full extent of the law by both criminal and civil authorities.
New Jersey’s price gouging law prohibits excessive price increases during a declared state of emergency, or for 30 days after the termination of the state of emergency. Excessive price increases are defined as price increases that are more than 10 percent higher than the price at which goods and services were sold during the normal course of business prior to the state of emergency, unless the increase can be attributed to the seller’s own increased costs during the emergency. Governor Chris Christie declared a State of Emergency on January 22, 2016.
Following Superstorm Sandy, the Division of Consumer Affairs, assisted by the Division of Law, filed price gouging lawsuits against 27 businesses – mostly gas stations and hotels/motels – for allegedly excessive price increases. All of the lawsuits have been settled, resulting in over $1 million in civil penalties, cost reimbursements to the State, and restitution to consumers. In addition, led by the Division of Criminal Justice, prosecutors across the state have charged more than 120 cases statewide relating to Superstorm Sandy fraud.
“The majority of merchants and businesses in New Jersey would never take advantage of consumers during a State of Emergency, but those unscrupulous enough to try will be held accountable,” said Acting Attorney General John J. Hoffman. “The state’s price gouging laws will be strictly enforced to ensure consumers are not victimized by those looking to profit from their suffering.”
“Consumers who suspect they’re being illegally over-priced for food, gas, generators, lodging or storm-related services in connection with this weekend’s inclement weather should contact the Division of Consumer Affairs immediately,” said Steve Lee, Acting Director of the New Jersey Division of Consumer Affairs. “Division investigators stand ready to swiftly enforce the laws to protect consumers during this State of Emergency.”
“Prosecutors across the state brought criminal charges against more than 120 defendants who committed fraud in connection with Superstorm Sandy,” said Elie Honig, Director of the New Jersey Division of Criminal Justice. “As New Jersey faces its first major snowstorm of the year, we will continue to work with the Division of Consumer Affairs to ensure that wrongdoers are prosecuted.”
Price-gouging violations are punishable by civil penalties of up to $10,000 for the first offense and $20,000 for the second and subsequent offenses. Each individual sale of merchandise is considered a separate and distinct event.
TIPS TO CONSUMERS CONCERNING PRICE GOUGING:
- Be Aware of New Jersey’s Price Gouging Law (N.J.S.A. 56:8-107 et seq.). During a State of Emergency, as declared by Governor Chris Christie or certain others, excessive price increases are illegal. An excessive price increase is any higher price that exceeds 10 percent of the price prior to the State of Emergency.
- If You Believe Price Gouging is Occurring, Contact the Division of Consumer Affairs. Contact the Division of Consumer Affairs at (973) 504-6240. A special voicemail box has been set up to address storm- related price gouging complaints and will be checked regularly, even if state offices are closed. Please leave your name, contact information, nature of the complaint, and as much information about the business you are complaining about that you have, including the name of the business and location. If possible, consumers should note the price of a good or service prior to the declared state of emergency, and the price after the state of emergency has been declared, when filing a complaint. Investigators will work to address the complaint as quickly as possible.
Following the Superstorm Sandy State of Emergency, the New Jersey Division of Consumer Affairs, working with county consumer affairs offices, reviewed more than 2,000 consumer complaints in the days immediately following the landfall of Superstorm Sandy. The New Jersey Division of Consumer Affairs investigated approximately 200 businesses for alleged price gouging. The New Jersey Division of Criminal Justice took action in over 100 cases statewide relating to Superstorm Sandy, bringing various criminal charges in price gouging, fraud, and other cases.
Some examples of the matters relating to Superstorm Sandy brought by the Division of Consumer Affairs include the following:
- The Division of Consumer Affairs took action against a hotel that allegedly raised its room rates up to 208 percent following Superstorm Sandy. The hotel allegedly charged $219 after Sandy, for a room that was rented at $71.20 prior to the State of Emergency.
- The Division of Consumer Affairs took action against a gas station that allegedly charged as much as $5.09 per gallon for credit card sales of premium gasoline – an increase of 34.2 percent above the price prior to the State of Emergency.
- The Division of Consumer Affairs took action against a Monmouth County based landscaping company that allegedly sold various models of Powerhouse generators at prices ranging from $800 to $1,550, representing markups of between approximately 82 percent and 155 percent, and also allegedly sold generators that had previously been recalled.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse in connection with this winter storm, can file anonline complaint with the New Jersey Division of Consumer Affairs by visiting its website or by calling (973) 504- 6240.