Senator Marcellino And Senator Fuschillo Advance Price Gouging Legislation

Carl L Marcellino

May 05, 2006

Senator Carl L. Marcellino and Senator Charles J. Fuschillo, Jr. today announced the movement of legislation to help prevent price gouging after an emergency. The bill calls for stiffer penalties and defines price gouging. The legislation was approved by the Senate Consumer Protection Committee earlier this week. The legislation is sponsored in the Assembly by Assemblyman Tonko.

"At times of national, state or local disasters it is un-American to take advantage of a tragedy. Whether it be 9/11 or Hurricane Katrina, this legislation puts teeth in New York state’s laws to combat the unconscionable crime of price gouging," said Senator Marcellino, prime sponsor of the legislation.

"With gas prices now over $3 per gallon, the state must do all that it can to protect consumers from being scammed. Right here on Long Island, we have already seen that there were gas stations willing to use the tragedy of Hurricane Katrina as an excuse to selfishly increase their profits. By raising the maximum fines for this crime, we would better protect consumers by removing any financial incentive for businesses to illegally inflate their prices," said Senator Fuschillo, Chairman of the Senate's Consumer Protection Committee.

The bill defines price gouging as an increase in prices of more than 25 percent following the onset of an abnormal market disruption. In addition, the bill allows the courts to levy a penalty of $500 per violation, plus three times the total profits. Currently, the maximum penalty a court can impose is a one time $10,000 fine, regardless of the profits exacted or the number of consumers defrauded.

Over the years, the New York State Attorney General's office has successfully enforced the price gouging law in the wake of several different types of emergencies, and included such items as milk, generators, home repair and hotel rooms. However this legislation will give the Attorney General’s office the tools to prosecute the crime of price gouging.