NEWARK – The Office of the Attorney General and the New Jersey Division of Consumer Affairs today warned residents in flood-ravaged New Jersey communities in Bergen, Essex, Monmouth, Ocean, and Passaic counties to beware of price gouging and other disaster-related consumer fraud in the aftermath of this week’s torrential rains.
“The majority of merchants and businesses in New Jersey would never take advantage of consumers during a State of Emergency, but we’re asking residents to immediately report anyone seeking to illegally profit from this natural disaster,” said Attorney General Grewal. “The state's price gouging laws and other consumer protections will be strictly enforced to protect residents from being victimized at a time when they're at their most vulnerable."
New Jersey's price gouging law prohibits excessive price increases within 30 days after a declared state of emergency, unless the time has been extended by the Governor. On Tuesday August 14th, Governor Phil Murphy signed Executive Order 33, declaring a state of emergency in the five counties and allowing for the extension of state resources, as necessary and as requested, into communities most directly impacted by flooding.
Excessive price increases are defined as price increases that are more than 10 percent higher than the price at which merchandise was sold during the normal course of business prior to the state of emergency.
“We will not allow anyone to unlawfully increase prices for food, gas, hotel rooms, generators, or other necessary items or services, or otherwise take financial advantage of flood victims as they struggle to recover,” said Paul R. Rodríguez, Acting Director of the Division of Consumer Affairs. “The Division also stands ready to swiftly enforce the laws that protect consumers against repair scams, charity scams, and other disaster-related fraud. In times of emergency, we should all be looking for ways to help those in need, not take advantage of them.”
Price gouging violations are punishable by civil penalties of up to $10,000 for the first offense and $20,000 for the second and subsequent offenses. Each individual sale of merchandise is considered a separate and distinct event.
Flood victims are often faced with thousands of dollars worth of repairs to make their homes habitable again. Homeowners can protect themselves from dishonest home improvement contractors by heeding the following tips:
- Shop around and obtain at least three written estimates. Ask the contractors if they have liability insurance (as required by law) and whether they will be using subcontractors on the project.
- Call Consumer Affairs’ Consumer Service Center at 800-242-5846 or 973-504-6200 to find out if the contractor you are considering is registered or has been the subject of complaints and/or action by the State.
- Look for red flags. Be wary if a contractor tells you that he or she needs a large payment before the home repair work can begin, insists that you pay cash, or tells you a written contract is not necessary – that a verbal agreement is enough. Contracts for home improvement projects costing $500 or more must be in writing.
- Avoid contractors that don’t have a fixed location that you can go to, if needed. All home improvement contractors must be registered with Consumer Affairs. If you hire a contractor, make sure you get names, addresses, phone numbers, license plate numbers and vehicle descriptions for all individuals working on your home. If a problem does occur, this information will help law enforcement locate the contractor.
- Before you let in anyone who claims to have been sent by a utility companyto inspect your home, ask for identification. Representatives of utilities and reputable businesses will have proper identification. When in doubt, call the company to verify the identity of the worker.
If you believe price gouging or other disaster-related fraud is occurring, contact the Division of Consumer Affairs at (973) 504-6240. Please leave your name, contact information, nature of the complaint, and as much information about the individual or business you are complaining about that you have, including the name and location. In cases of suspected price gouging, when possible, consumers should note the price of a good or service prior to the declared state of emergency, and the price after the state of emergency has been declared, when filing a complaint. Investigators will work to address the complaint as quickly as possible.