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Expanded price gouging law to help consumers, says AG Cooper

Release date: 7/19/2006

Change in law pushed by Cooper wins final approval from NC General Assembly

Raleigh: A measure pushed by Attorney General Roy Cooper to expand North Carolina’s law against price gouging won final approval from legislators on Wednesday.

“By expanding this law, we’re warning price gougers that you can’t use a crisis as an excuse to make an unfair buck off of consumers,” said Cooper.

The North Carolina House today concurred with the changes that the NC Senate had made to House Bill 1231. The measure had previously passed the Senate and now awaits Governor Mike Easley’s signature.

Price gouging—or charging too much in times of crisis—is already against North Carolina law when a disaster has been declared by the Governor such as following a hurricane or flood here in our state. Cooper fought to expand the law so that consumers will be protected from price gouging whenever the market for critical goods and services is disrupted or when a state of emergency is in effect.

Under the new law, prohibitions against price gouging will kick in whenever the Governor declares an abnormal market disruption for critical goods and services. The Governor will be able to make that declaration if the President declares a disaster outside of North Carolina that substantially disrupts our market, such as occurred in 2005 following Hurricane Katrina. The declaration of a state of disaster or state of emergency here in North Carolina will also trigger the price gouging law.

Unlike the current law, the new law will apply to all levels of the supply chain, from the manufacturer through the wholesaler and distributor to the retail shop. This makes it clear that price gouging is illegal, whether it occurs at the retail or wholesale level or if a business is simply passing on unreasonably excessive prices levied by someone higher up the chain.

When the law is triggered, the Attorney General’s Office can investigate potential price gouging and seek refunds for consumers who paid too much. The courts may also impose civil penalties against price gougers of up to $5,000 for each violation.

“We’ve already seen North Carolina’s price gouging law serve as a deterrent for unscrupulous businesses following hurricanes and other disasters,” said Cooper. “Now we’ve improved this tool we can use to protect consumers’ wallets and keep the playing field level for businesses that do right by their customers.”

  Contact:  Noelle Talley (919) 716-6413