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Price Gouging During a Natural Disaster

Often times in the event of a natural disaster, merchants charge high prices for certain necessary goods in order to make a profit off of individuals affected by a disaster. Several states have enacted laws that prohibit this type of price gouging.

In 1993 the state of Florida enacted a statute that protects disaster victims from unnecessary price hikes, Florida Statute 501.160. It prohib its the sale or rental of essential commodities at unconscionable prices during a declared state of emergency. Several of the goods that fall under this law include, lumber, ice, water, chemicals, and generators. The law dictates that during a declared st ate of emergency merchants may not grossly exceed the average price at which the commodity was sold in the area within the previous 30 days. The statute, does however, allow for merchants to pass along additional charges attributed to acquiring the good, as a result of the natural disaster. In addition, the Florida statute does not apply to sales by growers, producers, or processors or raw or processed food products. In Florida violators of the law are subject to a $1,000 fine.

Sources:

"Beyond Government," Harry Reid. The Florida Libertarian Party. http://www.atlantic.net/~dwatney/reid/reid16.ht

"Access Jacksonville Page", The Jacksonville Consumer Affairs Division. http://www.ci.jax.fl.us/pub/consumer/price.htm

"Price Gouging a Relative Term", Raleigh News and Observer. http://www.phlip.marist.edu/pindyck/news/pmi0923.htm

"Disaster Fraud" Consumer Protection, Mississippi Attorney Generalís Office. http://www.ago.state.ms.us/disaster.htm

Florida Statute 501.160 http://www.leg.state.fl.us/citizen/documents/statutes/1993/chapter%5F501%5F160.html

Florida Statute 501.204 http://www.leg.state.fl.us/citizen/documents/statutes/1993/CHAPTER_501_204.html- Florida

Florida Statute 501.211 http://www.leg.state.fl.us/citizen/documents/statutes/1993/CHAPTER_501_211.html

"How to Protect Yourself: From Price-Gouging After a Hurricane" The Florida Attorney Generalís Office. http://www.unf.edu/dept/upd/tiphur~1.htm

Texas Attorney Generalís Office, Deceptive Trade Practices Act http://www.oag.state.tx.us./WEBSITE/CONSUMER/dtpa_act.htm


Compiled by Group #4 on 3/9/98

Kelli Gardner

Noah Berliner

Elizabeth Thibault

 For additional information or any questions email agierzyn@zoo.uvm.edu or phone Professor Gierzynski at (802) 656-7973.

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