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New York to investigate post-Sandy price gouging for fuel, food

New York's attorney general Eric Schneiderman has ordered an investigation into alleged price gouging in the wake of Storm Sandy.

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NEW YORK, NY - NOVEMBER 03: A woman searches through donated shoes at relief center set up in a parking lot on November 3, 2012 in the Midland Beach neighborhood of Staten Island borough of New York City. With the death toll currently over 100 and millions of homes and businesses without power, the U.S. East Coast is attempting to recover from the effects of floods, fires and power outages brought on by Superstorm Sandy. New Jersey has begun rationing gas and the Department of Defense will be setting up mobile gas stations in New York City and Long Island. (ANDREW BURTON/AFP/Getty Images)

New York Attorney General Eric Schneiderman has ordered an investigation into suspected price gouging, after hundreds of consumers complained they were paying extra for essential supplies in the wake of Storm Sandy.

In a statement released today, Schneiderman promised there would be "zero tolerance for price gouging."

"We are actively investigating hundreds of complaints we've received from consumers of businesses preying on victims of Hurricane Sandy, and will do everything we can to stop unscrupulous individuals from taking advantage of New Yorkers trying to rebuild their lives."

The statement said most complaints were in connection with gas prices. Others cited higher-than-usual prices for generators, hotel rooms, food and water.

Some retailers have already been put on notice, Schneiderman said, urging consumers to report anything suspicious.

Price gouging, according to New York state law, is when vendors charge an "unconscionably excessive price" for essential goods or services during periods of  "abnormal disruption of the market" – extreme weather, for example, or power failures.

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The practice has already been observed post-Sandy in other states: in New Jersey, where excessive prices are defined as anything more than 10 percent higher than usual, 65 businesses have already been subpoenaed, CBS reported on Friday.

Bloomberg found numerous complaints of price gouging on Twitter, where users bemoaned having to pay $35 to take a shower at a Manhattan health club, and $1,000 to stay at a large New York hotel.

While consumers and politicians decry it, some commentators have defended price gouging over the past week on the grounds that it encourages businesses to make sure goods are available and consumers to think more carefully about what they really need.

Yet Time's David Futrelle describes the practice as "economically sound, ethically dubious": it may make business sense, he writes, "it's just that right now, with so many people suffering, the cold logic of capitalism seems callous and morally suspect, an affront to basic notions of fairness."

It's also at odds with what the Atlantic Wire calls "New York's new niceness": the instinct, in evidence in the thousands of donations to charity and voluntary clean-up efforts, to pull together and help those worst afflicted by the storm.

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http://www.globalpost.com/dispatch/news/regions/americas/united-states/121105/new-york-post-sandy-price-gouging-investigation