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September 21, 2005
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Erickson: Senate Passes
Legislation to Fight Price Gouging
Businesses that
exploit disasters would face up to $10,000 in
penalties.
Harrisburg – Legislation co-sponsored by state Sen.
Ted Erickson (R-26) to prohibit price gouging during
and immediately after a state of disaster emergency
was approved by the Senate today.
Erickson said the legislation would prohibit
"unconscionably excessive" pricing during a declared
state of disaster emergency and 30 days after.
Drafted in cooperation with state Attorney General
Tom Corbett, the measure gives the Attorney General
the authority to investigate possible price gouging
and imposes penalties on violators.
A state of disaster emergency could be the result
of a natural disaster, labor strike, act of
terrorism, or other event, the senator noted.
"Emergencies bring out the best in most people.
However, there are always some who will seek to take
advantage of others," said Erickson. "The
legislation is designed to discourage price gouging
from happening, and enforcing penalties on violators
when it does occur."
Under the measure, consumers who suspect price
gouging could file a complaint with the Attorney
General's Bureau of Consumer Protection. If an
investigation turns up price gouging, the business
would face civil action of up to $10,000 in
penalties for each violation.
The
senator originally co-sponsored the legislation in
response to price gouging reported in the wake of
the Sept. 11, 2001 terrorist attacks, and again in
2003. However, each legislative session ended before
the General Assembly could act on the measure.
Under Senate Bill 450, pricing would be considered
"unconscionably excessive" if parties within the
chain of distribution (manufacturers, suppliers,
wholesalers, distributors or retailers) increase
prices by 20 percent or more over the average price
for the same goods or services available in the
affected area a week prior to the state of
emergency.
The
law would not apply to price increases caused by
additional expenses – such as replacement costs,
taxes and transportation. "I certainly understand
the need for businesses to recoup their costs and
make a reasonable profit. This bill is not aimed at
them. It targets business operators who seek to
exploit a disaster and take advantage of consumers
when times are difficult," said Erickson.
Senate Bill 450 was
sent to the House of Representatives for
consideration.
CONTACT: Tom Golden –
610.853.4100
