Severe storms and flooding in our state have left widespread damage in their wake, with many Arkansans already starting to rebuild and repair. These natural disasters have prompted Gov. Beebe to declare a state of emergency, triggering the Arkansas Price Gouging Law.
Accordingly, Attorney General Dustin McDaniel today issued this special consumer alert to inform Arkansas residents about the law.
Act 376 of 1997 prohibits businesses from increasing prices more than 10 percent in the event of a state of emergency. The prohibition remains in effect for 30 days after a governor or the president declares the state of emergency.
“While most of us are helping our friends and neighbors in need after these storms, some unethical businesses may attempt to capitalize on others’ hardships,” McDaniel said. “Our price-gouging law helps ensure consumers may purchase what they need after a storm at a fair price. I encourage any Arkansan who suspects a violation of the price-gouging law to call my office as soon as possible.”
The law was approved by the General Assembly as an amendment to the Arkansas Deceptive Trade Practices Act. That act is enforced by the Attorney General and county prosecutors.
The law sets a general 10 percent cap on prices during an emergency and covers most anything related to storm recovery, such as food and water, batteries, fuel, and construction materials.
Businesses are permitted to exceed the 10-percent cap in limited situations, such as if the business can establish that the higher price is directly attributable to additional costs either imposed by a supplier, or if the cost is tied to labor and materials needed to provide the services to the consumer. In that circumstance, the business may only charge 10 percent plus the mark-up normally applied by the business before the onset of the state of emergency.
Violators of the price-gouging law could face civil penalties of up to $10,000 per violation and may be required to pay restitution to consumers. A violation is also a Class A misdemeanor.
Also, McDaniel asked Arkansans to be vigilant as they recover from the storms, reminding consumers to be wary of “storm chasers” who go door-to-door offering tree removal or home repair services. Consumers should get estimates from several contractors, avoid unknown companies, never pay in advance, and always get the scope of work in writing. To report possible price gouging or to lodge a storm-related consumer complaint, contact the Attorney General’s Consumer Protection Hotline at (501) 682-2341 or (800) 482-8982, or visit the Attorney General’s website at www.arkansasag.gov.