Price gauging not tolerated

Published 12:00 am Wednesday, August 31, 2005

Those looking to take advantage of residents victimized by Hurricane Katrina should think twice before asking unreasonable rates for tree removal and other yard work, home repair and necessities such as batteries, flashlights, generators, ice, gas, kerosene or anything else that is in great demand following a storm of this magnitude.

“It is despicable and against the law to charge outrageous amounts for necessities that people must have in times of emergency,” said Alabama Attorney General Troy King. “While this storm may inflict damage on our state, we will not tolerate allowing anyone to take advantage of and inflict further harm on the people of Alabama. My office will closely monitor this storm and we will continue to pray for those in harms way.”

On his office’s Web site,

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King warned that his office will be on the lookout for people who would “seek to profit illegally at the expense of Alabamians who suffer damage from Hurricane Katrina.”

Local officials will be watching as well, and residents who feel they have been a victim of price gauging, or have witnessed such actions, are encouraged to contact their local law enforcement agency.

“If anyone has any complaints, call me or the public safety director, Jeff Manuel,” Demopolis Mayor Cecil Williamson said. “The attorney general definitely wants to hear about that.”

Chamber Director Jay Shows said as far as tree removal and home repair, where people may simply show up on a homeowner’s doorstep and offer to perform a job, he really isn’t sure what to say to a homeowner.

“I guess you could call a local tree surgeon or someone like that to determine how much money is reasonable, but unfortunately it’s like retail – if you buy something one week at full price, and then you see it somewhere else next week half-price, there isn’t much you can do,” he said. Shows explained that once a homeowner has agreed to pay someone to do the work, and he or she finds out later it was an exorbitant price, nothing can be done.

King’s office has tips on how to avoid being taken advantage of, however:

– Find out as much as you can about the workers, especially if they make unsolicited contact with you or have come from out-of-town after a natural disaster;

– Ask for proof that they are bonded or insured.

– Ask if they are licensed. Regulations vary, but plumbers and electricians must be tested to be licensed by the state. General contractors may be required to have local licenses if they do major work, but those who do small odd jobs may not have to be licensed.

– Ask if this particular job requires a permit. Most construction and home repairs of major significance require a permit from the county or city. Do not let them talk you into applying for the permit in your name. If they do not want to be known to local officials, they may be hiding a bad reputation.

– Get a written estimate detailing the work to be done and setting a completion date.

– Ask for references. Get names and addresses, and consider checking examples of work they have done.

– Do not pay too much up-front. You should pay only a minimal amount, perhaps as much as one-fourth, to indicate good faith and ability to pay. If they tell you more money is needed in advance, be wary. They should be able to pay for supplies or have credit to make necessary purchases until

you compensate them afterward.

– Make sure you can contact them. Be wary if they can only give you a pager number, a cell phone number, or a post office box address. Businesses with established addresses may be safer.

Residents should keep in mind the state law prohibits “unconscionable pricing,” meaning price gauging does not have to be tolerated and it can lead to fines and possible revocation of business licenses..

This law becomes effective when the Governor has declared an official state of emergency, King said.

“Although what constitutes an unconscionable price is not specifically set forth in state law, a price that is 25 percent or more than the average price charged in the same area within the last 30 days–unless the increase can be attributed to a reasonable cost– is a prima facie case of unconscionable pricing,” the Web site states. The penalty for price gauging

is a fine of up to $1,000 per violation, and those determined to have willfully and continuously violated this law may be prohibited from doing business in Alabama.

Home repair fraud remains a persistent and serious problem in Alabama, King said, and it is a particular threat during times of natural disaster. He said consumers need to be wary and report any problems of alleged fraud or illegal price gouging to his Family Protection Unit, which oversees consumer complaints and other issues regarding the security and well-being of Alabama’s families

The Family Protection Unit can be reached by calling (800) 230-9485, by visiting the unit’s Web page at, or by writing to 11 South Union Street, Montgomery, Ala. 36130.

“The good people of Alabama stand together in times of crisis, and we have laws to protect against those who would profiteer and take advantage of their fellow-citizens,” King said.