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Price Gouging

An official state of emergency is declared during significant public safety concerns, such as hurricanes, pandemics, acts of terrorism, etc. Most areas see a rise in crimes of opportunity, such as looting, during such times, which has led to the implementation of harsher penalties for certain crimes when committed during a state of emergency. If you or a loved one are facing charges for a state of emergency crime, contact Halon Law today to schedule a free consultation. 


What is Price Gouging?


Aside from looting, price gouging is a common and sinister crime that takes advantage of scared, stressed citizens in chaotic, uncertain times. 


Defined as the artificial inflation of the price of goods, price gouging basically means raising the price of a product in high demand to make extra profit off desperation. Price gouging occurs all the time, especially during shortages of certain items or even just the fear of a shortage. During a state of emergency, you can see how easy it would be to make a large sum of money simply by raising the price of, for example, bottled water. 


However, while price gouging in the extreme is generally illegal, price gouging during a declared state of emergency is met with even harsher penalties. According to Florida Statute 501.160, once a state of emergency has been declared, it is illegal to rent or sell essential commodities at “unconscionable prices.” 


Essential commodities, in this instance, are generally considered to include basic necessities like water and food, along with other sanitary supplies such as toilet paper. This statute also extends the definition to include rent, preventing landlords from raising their monthly rates to an unconscionable degree. 


What is an Unconscionable Price?


Say the average price for a single bottle of water is $1.50. If the price of that bottle is raised to $1.75 during a state of emergency, is that unconscionable? Lots of legal terminology is vague at best, but in this case, that ambiguity is intentional. By leaving any specific amount out of the law, there’s room for interpretation based on circumstance and situation. What qualifies as an unconscionable rise in price must be determined by the presiding judge. Both the prosecution and defense can make arguments for or against unconscionable versus reasonable price increases. 


The only exception to the increase of pricing during a state of emergency lies in any increased costs on behalf of the seller. So, for example, say it normally costs a shop owner $1.25 to procure a single bottle of water, and they normally sell that bottle at $1.50, making $0.25 in profit per bottle. 


Now say that the cost to obtain a single bottle of water rises to $1.50 during a state of emergency, due to circumstances like the cost of gas for shipping, increased rates of pay for employees to compensate workers during a state of emergency, etc. In turn, the seller raises the price they sell a single bottle of water to $1.75. 


They have only raised the price enough to maintain the profit margin established prior to the state of emergency, and so the price increase can clearly be connected to an increase in seller cost. There’s a good argument here that the price increase was necessary, and does not qualify as price gouging. 


What are the Consequences of Price Gouging?


During a state of emergency, the law relies on consumers to report any suspected price gouging. These reports are investigated thoroughly, and if price gouging is found, the seller or business in question is usually first present with a written warning. These warnings advise the seller to lower their prices back within reason immediately, or risk further legal action. 


If the seller or business does not comply, they may be charged with a state of emergency violation, which is considered a second-degree felony. As such, it is punishable by up to 60 days in jail, along with a $500 fine. 


In addition, Florida’s Attorney General’s Office may pursue civil penalties of $1,000 per violation, with a maximum $25,000 for multiple violations within a single 24-hour period. 


Depending on the circumstances of the case, the seller may also be in violation of Florida’s Deceptive and Unfair Trade Act (FDUTPA). This act declares “unfair methods of competition, unconscionable acts or practices, and unfair or deceptive acts or practices” in trade or commerce to be illegal. A single FDUTPA violation is subject to a $10,000 penalty, possibly up to $15,000 if the violation involves a senior citizen, disabled person, military service member, or military service member’s spouse or child.


What Happens if I’m Accused of Price Gouging During a State of Emergency?


If you receive an official warning from the Attorney General’s office regarding potentially unlawful price increases on essential commodities, don’t panic – a warning is not a violation. 


Even if a government official appears to ask you questions or subpoena your price records, there are steps you can take to protect both yourself and your assets: contacting an experienced defense attorney, like Hanlon Law. We’ll ensure any subpoenas are in order, read through any official warnings, and advise you on how to respond, what to include in your response, and what action you should take to avoid a violation. 


Generally speaking, though, you are expected to comply with any investigations regarding potential price gouging, and will be expected to respond to any official warnings. 


An official warning will likely include every consumer complaint submitted against you, and ask you to provide a detailed response to each instance. Such responses might include circumstances surrounding the alleged price increase (such as increased seller cost), or alleviatory steps you have taken (reducing the product’s price back to what it was before the state of emergency, offering refunds, etc). You might also include records of the product’s price prior to and during the state of emergency, along with any other relevant documentation. 


Kissimmee Criminal Defense Lawyers 


Accusations of price gouging during a state of emergency are no small thing. It’s important to take such claims seriously, and to meet them with proper action. At Halon Law, our legal team has nearly two decades of experience in the defense business. We’ll help you understand what’s going on, how to respond, and what steps to take to avoid an official violation. 


If you’re under investigation for claims of price gouging or have been served an official notice of warning, don’t leave your business and livelihood to chance. Contact Hanlon Law today to schedule a free consultation.

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