Texas Attorney General: Alex Triggers Price Gouging Law

July 1, 2010

Texas Attorney General Greg Abbott has advised South Texans affected by Hurricane Alex that Gov. Rick Perry’s disaster declaration activates state laws that prohibit price gouging.

Hurricane Alex had developed into a Category 2 storm with 105 mph winds by the time it made landfall in Northeastern Mexico around 9 p.m. on June 30. While South Texas was spared the brunt of the storm, extensive flooding has been reported as a result of the hurricane. The possibility of isolated tornadoes continues in extreme South Texas, according to the National Hurricane Center.

The AG’s office said the disaster declaration triggers the provision of the Deceptive Trade Practices Act which makes it unlawful to sell or offer to sell fuel, food, medicine, or another necessity at an exorbitant or excessive price.

“South Texans should take steps to protect themselves and report any alleged price-gouging to the Office of the Attorney General,” Abbott said. “After the storm subsides, residents should carefully screen offers for repairs or construction services and be sure to obtain accurate information before contracting for repair services.”

Gov. Perry’s disaster declaration affects the following counties: Aransas, Bee, Brooks, Cameron, Duval, Hidalgo, Jim Hogg, Jim Wells, Kenedy, Kleberg, Live Oak, McMullen, Nueces, Refugio, San Patricio, Starr, Webb, Willacy and Zapata.

When Texans turn to repairmen to help in the clean-up and rebuilding process, they should consider these tips:

  • Deal only with licensed or bonded contractors or builders;
  • Contact an insurance adjuster to get an estimate of the damage and repair cost;
  • Be wary of contractors who solicit services door-to-door, especially those that are unfamiliar or from out of town;
  • Get the salesperson’s license plate number;
  • Don’t rush into signing a contract, and never pay up-front for promised work;
  • Secure the terms of any warranty work in writing; and
  • Ask for references, or rely on recommendations from friends or relatives who have had experience with honest contractors.

Although Texas’ price gouging law prohibits vendors from illegally raising prices to reap exorbitant profits during a disaster, it does allow retailers to pass along wholesale price increases to customers. Thus, in some cases, increased prices may not necessarily signal illegal price gouging.

Texans who believe they have been deceived by fraudulent business practices should call the Office of the Attorney General’s toll-free complaint line at (800) 252-8011 or file a complaint online at www.texasattorneygeneral.gov.

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