Disaster Preparedness

How to Recognize Price Gouging

NBC 7 Responds takes a look at what counts as price gouging and how to report it

NBC Universal, Inc.

Whenever disaster strikes there are rumors and warnings of price gouging. What is it? Basically, if you see prices spike during an emergency, it may be price gouging. Few people know how to spot it when they see it, so here's some things to look for.

Price gouging is when a seller unfairly raises the price on a good or service during an emergency. Businesses are still allowed to raise prices, but they have to be within reason.

California state law defines price gouging as a 10%, or more, increase in the price of a good or service after an emergency has been declared. However, individual cities may have more restrictive policies in place.

However, only a few people have the power to declare an emergency. California's Office of the Attorney General says:

"The statute applies immediately after the President of the United States, the Governor of California, or city or county executive officer declares a state of emergency."

The OAG does say if a business can prove it is now paying more for the good or service, it may not count as price gouging since it is raising the price to pay for the new cost.

If you suspect a business of price gouging, you can file a consumer complaint with the Attorney General's website here.

If you think you have experienced or seen price gouging, here's what you should take note of:

  • Who is selling the product?
  • What is the product?
  • When and Where did you see this happen?
  • Why you think this is price gouging

It also is a good idea to also take a picture of the product and its new price.

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