Rhode Island imposes price-gouging protections

By Keith Goble, Land Line state legislative editor | Monday, June 25, 2012

A new rule in Rhode Island shows little tolerance for merchants in the state who take advantage of special circumstances, such as a blizzard or hurricane, to jack up the price of goods, including fuel.

The National Conference of State Legislatures reports nearly 30 states have some type of price gouging ban with others pursuing their own rules. The laws in many of those states are triggered by emergency declarations.

Gov. Lincoln Chafee signed into law a bill to prohibit Rhode Island individuals and retailers of “essential commodities” from engaging in price gouging during a market emergency or when a declaration of a state of emergency is issued. Essential commodities included in the protection include motor fuels, home heating fuels, food and water.

Effective immediately, retailers are prohibited from charging an “unconscionably high price” for goods, where the amount charged is an obvious disparity from the average price at which the same, or similar, commodity was available for purchase in the affected area immediately prior to an emergency situation.

Violators of the new rule would face $1,000 fines, with a per day total of $25,000. Any relief determined by the court to be appropriate would also be applicable.

Rep. Samuel Azzinaro, D-Westerly, said the new rule – H7409/S2606 – is necessary because until now Rhode Island has not had any protection from price gouging.

“It troubles me, especially considering how high gas prices are now, how much higher they could climb if someone tried to take advantage during a real emergency,” Azzinaro said in a previous statement.

“We may only be able to complain about today’s gas prices, but we can make sure that, in the face of some emergency, Rhode Islanders don’t get robbed at the pump.”

Critics of the new rule say it is subjective. They caution that it would be very difficult to prove unconscionably high prices are being charged for goods.

To view other legislative activities of interest for Rhode Island, click here.

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