Fla. AG Settles Hurricane Charley Price Gouging Case

December 14, 2004

Florida Attorney General Charlie Crist has announced a settlement with a Naples hotel that had been the subject of a price gouging investigation for inflating room rates in the immediate aftermath of Hurricane Charley.

Under the settlement agreement, the Lemon Tree Inn, located at 250 Ninth Street South in Naples, has agreed to reimburse guests for the amounts they were overcharged in the weeks following the storm. During the week after Hurricane Charley made landfall, the Inn reportedly raised its rates approximately 32.6 percent over its previous average base room rate of $59. Over the next few weeks, the average room rate gradually descended to normal.

“The goal of any price gouging investigation is to reimburse consumers who were wronged and make sure the business never again tries to make an illegal profit. This settlement assures that both of those outcomes will happen,” said Crist. “Thanks to the cooperation of the Lemon Tree’s owners throughout our investigation, this unfortunate episode has been brought to a successful conclusion.”

Under the settlement agreement, the Lemon Tree Inn will issue refunds of 32.6 percent to consumers who stayed at the Inn between Aug. 13 and Aug. 20. Guests who stayed at the Inn between Aug. 21 and Aug. 27 will receive refunds of 21.3 percent, while those who stayed there between Aug. 28 and Sept. 3 will be issued refunds of 6.1 percent. If any of the guests cannot be located, their share of the refunds will be paid to the Florida Hurricane Relief Fund. In addition, the Lemon Tree Inn agreed to pay $10,000 in costs and fees to reimburse the state for the costs of the investigation.

Florida’s price gouging statute requires that the cost of necessities like lodging, food, water and petroleum must remain at the price that was average during the 30 days immediately before the Governor declares a state of emergency.

Violations of the price gouging statute are subject to civil penalties of $1,000 per violation up to a total of $25,000 for multiple violations committed in a single 24-hour period. Florida’s Deceptive and Unfair Trade Practices Act provides for civil penalties of $10,000 per violation or $15,000 for violations that victimize a senior citizen or handicapped person.

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