Natural disasters and global crises are difficult enough without companies raising the prices of essential goods and services during a challenging time. However, many businesses still do this in an attempt to generate a higher profit margin during a short time when the demand for a particular commodity is higher. In many places, this “price hike,” also called price gouging, is illegal.
Is price gouging in a pandemic legal? Here’s what you should know and when to seek legal assistance from an experienced consumer protection law firm.
What Is Price Gouging?
When a retailer raises the price of services, goods, or commodities well over what is considered appropriate or ethical, this is known as price gouging. It most frequently occurs happens following a sharp increase in demand or decrease in supplies.
Hefty price hikes for essential commodities like gasoline, water, and food staples are a common occurrence following natural disasters. Businesses that gradually raise the prices of goods and services to keep up with inflation are not price gouging, even if the price is high.
Price Gouging Laws
No federal legislation exists that prohibits businesses from drastically increasing their prices in a disaster, however, most states do have laws against this. I n places where there are no clear laws prohibiting price gouging, however, presidential executive orders might be issued to restrict the practice during nationwide crises, such as the COVID-19 pandemic.
Price Gouging in Massachusetts
The Commonwealth of Massachusetts has price gouging laws in place already that prevent businesses from charging “unconscionably high prices” for services, commodities, and goods during a statewide or national crisis. The law only applies to goods and services necessary for the interest of public health and safety.
However, on March 20, 2020, Massachusetts’ Attorney General Maura Healey announced that the Commonwealth put in place an additional regulation to prevent price gouging of products and services specific to the COVID-19 pandemic, such as face masks, gloves, hand sanitizer, etc.
Price Gouging in New Hampshire
Unfortunately, New Hampshire is one of 15 U.S. states that do not have any laws in place to discourage, prevent, or penalize price gouging. On March 23, 2020, then-President Donald Trump issued an executive order aimed at prohibiting the hoarding of essential supplies and medical resources.
On March 23, 2021, New Hampshire senators introduced Bill 138, which still has several stages to go through before it can be passed into law. This bill aims to create baseline price gouging laws for the state, inspired by incidents of serious price hikes across the state at the beginning of the COVID-19 pandemic.
Penalties for Price Gouging
Violations of price gouging laws vary between states. Most often, businesses are assessed civil penalties in an amount relative to the increase in prices. For example, two gas stations that price gouge after a local flood may face different fines if one gas station raised their prices significantly higher than the other. Often, these fines are in excess of $10,000 for each offense.
How to Report Price Gouging
You can usually report price gouging to the Attorney General’s office in your state. Most states offer anonymous reporting, however, you can provide your identifying information if you were personally a victim of price gouging.
The Attorney General will investigate your claim and the business(es) named but cannot provide you with any remediation or compensation. In order to pursue financial restitution for this type of violation of your consumer rights, you must hire a personal lawyer for your case.
How to Protect Yourself Against Price Gouging
The best way to protect yourself against unconscionable price hikes during the COVID-19 pandemic or any other natural disaster or crisis is to maintain awareness of supplies and prices in your area. Know ahead of time what essential items like gloves, masks, gasoline, and water should cost and shop around with businesses in your area to find who is offering the fairest price.
Ideally, you will be able to forgo participation in price gouging by simply not purchasing supplies, goods, or services with an inflated cost. However, this may not be possible to do during a pandemic or other disaster.
Regardless of the cost, many people need gasoline, food, medical supplies, etc. and have to pay whatever price the retailer charges. This is where the goal of price gouging lies; to force people who have a non-negotiable need for a commodity to pay a higher price because they cannot go without it.
If you are forced to purchase a price-gouged product or service because you had no other option, keep all receipts and documentation related to the transaction to give to your attorney later.
When to Contact a Consumer Protection Lawyer
Being a consumer today requires more common sense and discernment than ever before. As state and U.S. legislators allow corporations in America to dictate consumer law, it’s critical that consumers understand how to protect themselves and when to reach out to someone for help.
At Mazow | McCullough, PC, we have the skills needed to provide you with zealous, comprehensive legal representation when dealing with a consumer rights issue like price gouging. Not only can we help you recover any damages you and your family suffered as a result, but we can also help hold price gouging businesses and companies responsible for their unethical actions during a disaster or global crisis.
Contact us today for an initial consultation to discuss the merits of your case and to learn what your next step should be. Call now at (978) 744-8000 or toll free at (855) 693-9084.