This Weeks' Topic

Price Gouging

Do our laws protect us from price gouging? In the aftermath of hurricane Katrina, many Americans were outraged at the sudden rise in gas prices. While politicians promised to investigate and put a halt to price gouging, government-enforced price controls might be bitter medicine.

In light of the recent Hurricanes Katrina and Rita, price gouging has been a concern. How is price gouging different from any other increase in prices?

Price gouging is a sudden increase in the price of necessary goods in a time of emergency. Necessary goods are items such as food, water, or gas.

This is different from price increases in non essential items. For example, if there is a 40% increase in the cost of a luxury car, this is not price gouging, becauSe you can opt not to buy it. It is not essential to your survival .

What is the legal basis that makes it illegal to "price gouge "?

We need to remember two things. When a state of emergency is declared, it triggers certain protections for consumers.

In addition, the Unfair Trade Practice laws in Missouri protect against price gouging. The enforcement of these laws are in the hands of the state attorney general.

Currently, there is an investigation looking into 50 allegations of price gouging after the recent hurricanes.

Are these actions by the state effective. Does it really result in any fines or penalties being accessed?

After the Sept. 11, 2001 attacks, Attorney General Jay Nixon fined gas stations $1,000 per sale if they were found to have committed price gouging.

A total of 48 stations were targeted, and Nixon collected about $60,000 in fines.

What should consumers do if they suspect price gouging?

The state has a consumer complaint hotline that anyone can call.

The number is 800-392-8222.

Actual price gouging is rare, and although we tend to overreact to any sharp price increases, our laws are enforced and gougers will be punished.

Disclaimer
This information is general and may or may not apply to your situation. The information contained on this web site is not to be considered as legal advice. Since no two cases are identical, we recommend that you contact an attorney in your jurisdiction to discuss the specific facts of your case. Furthermore, since statutes and case law change so frequently and due to information provided by other sources, we make no warranty or guarantee concerning the accuracy of the content of this or any other web sites to which we link.