AG Issues Price Gouging Warning

(MONTGOMERY)- Attorney General Troy King today warned unscrupulous contractors and businesses that he will take action against those who seek to profit illegally at the expense of Alabamians who may suffer damage and others who seek refuge in our state from the tropical storms and hurricanes, in the aftermath of Fay and as Gustav approaches.  He cautioned consumers to be wary of those who would victimize them through home repair frauds.

Attorney General King noted that state law protects consumers from price gouging when a disaster is so severe that a state of emergency is declared by the Governor.  As Tropical Storm Fay was reaching  Alabama, an official state of emergency was declared on August 23, which ended yesterday, and another state of emergency was declared today with Gustav nearing the United States.

"Alabamians stand together in times of crisis, and we have laws to protect against those who would profiteer and take advantage of our citizens," said Attorney General King. "It is wrong and against the law to illegally charge outrageous amounts for necessities that people must have in times of emergency. While storms may inflict harm on our people, we will not tolerate allowing anyone to inflict further harm by taking illegal and unfair advantage.  My office is on standby to respond and assist consumers with the hardships imposed by destructive weather, and to respond aggressively to reports of wrongdoing."

The state law that prohibits "unconscionable pricing" of items for sale or rent comes into play when the Governor has declared an official state of emergency. An unconscionable price is defined as one that is 25 percent or more than the average price charged in the same area within the last 30 days, unless the increase can be attributed to a reasonable cost. The penalty is a fine of up to $1,000 per violation, and those determined to have willfully and continuously violated this law may be prohibited from doing business in Alabama.

Home repair fraud remains a persistent and serious problem in Alabama, and is a particular threat during times of natural disaster. Attorney General King cautions consumers to be wary and to take the following precautions when hiring someone to make home repairs:

Ø    Find out as much as you can about the workers, especially if they make unsolicited contact with you or have come from out-of-town after a natural disaster;

Ø    Ask if they are bonded or insured, and to see proof of this.

Ø    Ask if they are licensed.  Regulations vary, but plumbers and electricians must be tested to be licensed by the state.  General contractors may be required to have local licenses if they do major work, but those who do small odd jobs may not have to be licensed.

Ø    Ask if this particular job requires a permit.  Most construction and home repairs of major significance require a permit from the county or city.  Do not let them talk you into applying for the permit in your name.  If they do not want to be known to local officials, they may be hiding from a bad reputation.

Ø    Get a written estimate, detailing the work to be done and setting a completion date.

Ø    Ask for references.  Get names and addresses, and consider viewing actual examples of work they have done.

Ø    Do not pay too much up-front.  You should pay only a minimal amount, perhaps as much as one-fourth, to indicate good faith and ability to pay.   If they tell you more money is needed in advance, be wary.  They should have sound financial standing to pay for supplies or have good credit to make necessary purchases until you compensate them afterward.

Ø    Make sure you can contact them.  Be wary if they can only give you a beeper number or a post office box address.  Businesses with established addresses may be safer.

Attorney General King urged consumers and officials to report any problems of alleged fraud or illegal price gouging to his Consumer Protection Division, by calling toll-free to 1-800-392-5658, by visiting his webpage at,  or by writing to 11 South Union Street, Montgomery, Alabama 36130.

Information Courtesy: The Attorney General's Office