Agency on lookout for price gougers

Published 4:09 am Friday, October 24, 2008

At the Virginia Department of Agriculture and Consumer Services (VDACS), we take our obligation to consumers very seriously. Last month, we had an opportunity to demonstrate that commitment when consumers across the Commonwealth reacted to the steep rise in gas prices which began to soar just as Hurricane Ike headed into Texas. Starting the morning of Sept. 12, phones in VDACS’ Division of Consumer Protection began to ring continually as consumers registered complaints about possible price gouging.

What exactly is price gouging? Let me provide a little background.

When Gov. Timothy Kaine declared a state of emergency — in effect Sept. 4 through October 18, 2008 — to protect Virginians from potential damage caused by Tropical Storm Hanna, the Virginia Post-Disaster Anti-Price Gouging Act also went into effect. That law prohibits a supplier from charging unconscionable prices for necessary goods and services such as motor fuels, water, ice and food during the 30-day period following a declared state of emergency. The basic test for determining if a price is unconscionable is whether the post-disaster price for a necessary item grossly exceeds the price charged during the 10 days immediately prior to the disaster.

Even as the calls continued to pour in, Kaine issued a news release in which he said, “It is intolerable that anyone would take advantage of consumers in this situation, and we will aggressively pursue unscrupulous operators charging excessive prices.” His statement reinforced the goal for us at VDACS.

Over the weekend of Sept. 12-14, I directed the Division of Consumer Protection to take calls 24 hours a day, seven days a week to accommodate the high volume of complaints. I also worked with division staff and with Verizon to add voicemail to the hotline to handle overflow calls. The 24/7 schedule remained in effect for a week and resulted in excess of 2,300 consumer calls lodging complaints about possible gas price gouging. Although most of the complaints were from the southwest area of Virginia, the calls came from every corner of the state.

Receiving information from consumers about excessive gas prices was only the first step in making the Anti-Price Gouging Act work for consumers. The next step was to gather information about the complaints. I asked Consumer Protection to quickly assemble a team of experienced inspectors to go into the field to look into the specifics of these questionable prices. Additional inspectors were also put on alert if more personnel were needed.

When the investigations are complete, the Attorney General’s Office will review details and background information about the complaints to determine whether or not to pursue additional action against any gas stations for the prices they charged. But in the meantime, I credit the immediate response by the Division of Consumer Protection with discouraging unscrupulous operators from taking undue advantage of consumers facing a difficult situation by charging exorbitant prices for an essential commodity.

During this recent emergency declaration, the problem was possible gas price gouging. Who knows what the next challenge will be? I am proud to say that the dedicated and experienced employees in VDACS’ Division of Consumer Protection will be ready and able to assist consumers.