Price Gouging, Take Two

by Joseph Adinolfi | Feb 22, 2012 12:29pm
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Posted to: Environment, Weather

Democratic legislators are calling for bipartisan support of a bill that would prevent price gouging during weather emergency – but contractors say the bill’s language is unfairly vague.

Sen. Majority Leader Martin Looney, D - New Haven, and Sen. President Donald Williams, D - Brooklyn, both testified in favor of the bill at a public hearing of the General Law Committee Tuesday.

But Bill Ethier, the chief executive officer of the Home Builders Association of Connecticut, said his organization supports the goal, but not the language of the bill.

General Law Committee Co-Chair Sen. Paul Doyle said he wants to see the bill passed as quickly as possible.

A similar bill to the was approved by the General Law Committee and the Senate last year, but floundered in the House when the session ended before it could be called to a vote.

Williams said that the state’s current law, which was passed by the legislature in 1986 after Hurricane Gloria, is “inadequate” because it ignores the entire service industry.

Presently, the owners of Connecticut businesses found to be guilty of jacking up prices on commodities like food and emergency generators after a state of emergency is declared by the governor, can face a fine of up to $1,000 or a year in prison.

Consumer Protection Commissioner William Rubenstein agreed with Williams about the current law’s deficiencies.

“Services are equally as likely to be subject to excessive pricing as commodities,” Rubenstein said.

He added that services account for “the bulk” of complaints received by the agency, and that it received many complaints about high prices for snow removal and hotel room pricing during the aftermath of both Tropical Storm Irene and the October snow storm.

The proposed bill forbids price gouging on emergency lodging, snow removal, flood abatement and any other cleanup or repair services in the wake of a storm.

The bill would use the prices of services during the 30 days before a state of emergency is declared as the benchmark.

In his written testimony, Ethier called the bill’s language “circuitous” because the term unconscionably excessive is used as the standard for punishment and its definition is vauge.

“In what could not be a more circuitous definition, the determination of what is ‘unconscionably excessive’ shall be based ‘among other factors’ on whether the price is ‘unconscionably excessive’ or if ‘there was an exercise of unfair leverage or unconscionable means’,” according to Ethier’s written testimony.

Also, regulators will consider “the amount charged grossly exceeded the price at which the same or similar goods or services were readily obtainable by other consumers in the trade area” when deciding if a business, contractor or hotel has engaged in deceptive business practices.

Rep. Louis Esposito, D - West Haven, said he wanted to ensure that the bill is fair to businesses and asked Williams to clarify the meaning of the phrase “unconscionably excessive,” the legal standard for price gouging included in the bill.

Williams said that in most cases, exorbitant prices are self-evident.

“If it costs $500, and they’re charging $5,000 – that’s certainly excessive,” Williams said.

Tags: price gouging, Sen. Donald Williams, Martin Looney, storm, William Rubenstein

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