Attorney General and Division of Consumer Affairs Share Price Gouging Alert

Tennessee Attorney General Bob Cooper is cautioning consumers to be alert to potential price gouging following deadly storms and tornadoes that occurred in West and Southern portions of Middle Tennessee on Monday.

Attorney General Cooper, in conjunction with the Division of Consumer Affairs, reminds consumers and business owners to be aware of potential price gouging. The price gouging act specifically cites that it is illegal to set prices that are grossly in excess of the price generally charged immediately prior to the disaster. The price gouging act is triggered when a disaster is declared by the state or by the federal government.

Another law, however, makes it illegal to “unreasonably [raise] prices or unreasonably [restrict] supplies or essential goods, commodities or services in direct response to a natural disaster,” regardless of whether the event occurred in Tennessee. Penalties for violations of the act are up to $1,000 per violation. Additionally, the Attorney General in conjunction with the Division of Consumer Affairs can request that a court issue injunctions and order civil penalties of up to $1,000 for each violation. The State can also seek refunds for consumers.

“During times of crisis most Tennesseans and Tennessee businesses do what is right and work to rebuild and heal the community,” Attorney General Cooper said. “However, there may be a minority that seek to take advantage of those trying to clean up and repair storm damage. While you may feel a sense of urgency to quickly make home repairs and clear debris, please try to ensure that you are using a reputable contractor.”

In addition to home repair, some may need gasoline and emergency supplies and services. These offerings are also subject to the price gouging laws. In the aftermath of Hurricanes Ike and Gustav in 2008, the Office of the Attorney General took action against dozens of gas stations for violations of the Tennessee Consumer Protection Act regarding inflated gas prices.

Problems that sometimes arise after a natural disaster include price gouging (in which a business unreasonably raises rates on essential goods and services during a State of Emergency or in response to a disaster), as well as fraud in the areas of home repair and debris removal.

“The Tennessee Department of Commerce and Insurance urges consumers to report suspected price gouging by filing a complaint with the Division of Consumer Affairs,” Deputy Commissioner and Acting Consumer Affairs Director Steve Majchrzak said. “Please be prepared to provide specifics – including the location of the business and the price charged, to facilitate the reporting process. Complaints can be filed online at http://tn.gov/consumer/PriceGougeCmplnt.shtml or by phone at (1-800) 342-8385.”

The Department of Commerce and Insurance urges homeowners to take the time to verify with the department’s Board for Licensing Contractors before signing any contracts. Commerce and Insurance’s license database, found at http://verify.tn.gov/. The site provides free licensing information for dozens of professions – including home improvement contractors. The Board for Licensing Contractors also has a page of tips for consumers at http://1.usa.gov/GYSKNP.

General Cooper and Deputy Commissioner Majchrzak offer the following tips to avoid becoming a con artist’s victim:

• Avoid high-pressure sales tactics to urging you to act quickly before signing a contact. Take time to make a good decision.
• Do not pay money upfront before the job is finished.
• Ask a questions and get references before agreeing from people you trust before hiring someone to do work for you.
• Get the whole deal in writing - if a contractor promises you something get it in writing – you can add it to the contract language and have you and the contractor initial it.
• Take photos of your property damage right away, during the course of the repair work and completion photos. You should also take photos of any repair work you believe was not done correctly.

If you have a problem with a business, you can file a complaint at www.tn.gov/consumer or call toll-free 1-800-342-8385. Consumer Affairs has a price gouging online complaint form at http://tn.gov/consumer/PriceGougeCmplnt.shtml.

You can download more information from the Attorney General’s website at: http://www.tn.gov/attorneygeneral/cpro/disasterrecovery.htm.