One station sold gas for a whopping $20 a gallon. A hotel reportedly charged guests more than twice the normal rate. One business sold bottles of water for a staggering $99 per case — more than 10 times some of the prices seen online, The Washington Post reports.advertisement - story continues below
As people in southeastern Texas face the devastating floodwater left by Hurricane Harvey, they are also grappling with predatory businesses that are selling basic necessities at astronomical prices. As of Wednesday morning, the state attorney general’s office had received 684 consumer complaints, a majority of which involved price-gouging of bottled water, fuel, groceries and other necessities.
“Anytime catastrophic storms hit Texas, we witness the courage of our first responders and the generosity of neighbors coming together to help their fellow Texas,” Attorney General Ken Paxton said in a statement. “Unfortunately, in the wake of the damage from storms and flooding, we also see bad actors taking advantage of victims and their circumstances.”
In a few cases, people reported having to pay $3.50 a gallon for gas in Houston, about a $1.30 more than the average gas price in the area, said Kayleigh Lovvorn, a spokeswoman for Paxton’s office. A Houston convenience store charged $20 a gallon, she said. It’s unclear if the jacked-up rates were the result of price-gouging or if the shutdown of refinery operations in the wake of Harvey was a factor, but the attorney general’s office is investigating.advertisement - story continues below
Meanwhile, some businesses sold water bottles for $8.50 each and cases for $99, Lovvorn said.
“These are things you can’t do in Texas,” Paxton told CNBC on Tuesday. “There are significant penalties if you price-gouge in a crisis like this.”
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— John Dodge (@dodgerman) August 30, 2017
The death toll from the hurricane has climbed to the double digits, as the devastating storm made landfall Wednesday morning in Louisiana.
State law prohibits businesses from charging exorbitant prices for necessities during times of disasters. Violators could face penalties of $20,000 per incident, Paxton said. If victims are age 65 and older, the penalty is more than 10 times higher — up to $250,000.
Lovvorn said she cannot give the names of the businesses cited in the complaints.
Twitter users have shared a picture of bottled water being sold Friday at a Houston-area Best Buy for more than $42 for a case containing 24 bottles. Online prices from other retailers range from $16 to about $30 per case. The company said that a few store employees decided to sell cases of bottled water even though Best Buy does not sell them by case.
“This was clearly a mistake in a single store,” Best Buy spokesman Shane Kitzman said in a statement. “We feel terrible about this because, as a company we are focused on helping, not hurting people affected by this terrible event. We are deeply sorry that we gave anyone even the momentary impression that we were trying to take advantage of the situation.”
Kitzman said the company does not have pricing in its computer system for cases of water. The employees priced the cases by multiplying the cost of one bottle by the number of bottles in a case, “arriving at a number that is far, far higher than normal,” Kitzman said.
At a Best Western location in Robstown, about 20 miles west of Corpus Christi, 40 guests were reportedly charged far above the normal rate. The overcharging was uncovered by NBC affiliate KXAN. A crew from the station booked a room and was charged $289.99 a night, according to KXAN. The total, $321.89 including taxes, is nearly three times the normal rate of $119 a night.
Best Western spokeswoman Kelly Dalton said in a statement that guests at that hotel have been reimbursed. She said the company is severing ties with the Robstown location, describing the actions “egregious and unethical.”
In Corpus Christi, a RaceWay gas station drew ire after a woman said she was charged more than $60 for two cases of beer, ABC News reported. RaceWay told the station that the overpricing was caused by a clerical error, not price-gouging. Ashleigh Womack, spokeswoman for RaceTrac Petroleum, which owns RaceWay, said the store in question is operated by an independent contractor who has control over pricing of store merchandise.
“Nevertheless, we take these allegations seriously and are investigating them with the operator,” Womack said.
The Texas attorney general’s office is urging people to report possible cases of scamming and price-gouging by calling 800-621-0508 or emailing [email protected].