Long Island 'Hotbed'

N.Y. AG claims third of L.I. stations deceived motorists; latest of several actions

MINEOLA, N.Y. -- Approximately one-third of Long Island gas stations surveyed engaged in deceptive practices, including wrongfully surcharging credit-card customers, New York state attorney general Andrew M. Cuomo found in an ongoing investigation by his office into the sale of gasoline, he said. The announcement follows on the heels of other recent AG actions aimed at fuel retailers in several states, including Iowa, Nebraska, Mississippi and Texas.

Cuomo's office conducted an investigation that inspected approximately 120 stations in Nassau and Suffolk counties in New York. The statewide [image-nocss] investigation discovered that the Long Island region has far more stations that illegally overcharge customers for fuel than any other region in the state. Under state law, retailers are not allowed to impose a surcharge on customers for using a credit card.

In addition, the investigation identified instances where stations across Long Island engaged in false advertising by only listing the lower cash prices on their street-view signage in order to lure patrons to the pump. In several cases, the stations allegedly failed to disclose that the price was only for cash transactions. Once at the pump, consumers discovered that they were charged more for using a credit card.

Cuomo announced that his office is in the process of sending "cease-and-desist" letters to approximately 43 stations that were found to be engaged in deceptive and unlawful practices. No criminal action will be taken if the stations respond to the request.

"Our investigation revealed that Long Island is a hotbed for gas stations that engage in deceptive practices where they display one price as a way to lure customers, and then charge them more at the pump," he said.

Cuomo noted that customers who use credit cards already pay a premium to the credit card company. An additional "usage fee" at the pump doubly penalizes the customer. The investigation also determined that by withholding the higher credit-card price until the consumer has already parked at the pump, the stations misled the consumer and prevented honest comparative price shopping from the street. Some stations did include the word "cash" in small letters on the large signs, but they were too small to read from the street, according to the AG's office.

In Iowa, Pronto Market gas stations in Sumner and Fairbank "improperly and fraudulently" sold E85-blended ethanol fuel as either unleaded regular gasoline or 10% ethanol-blend fuel, according to AG Tom Miller.

In Nebraska, AG Jon Bruning filed charges against Tom Weise, who owns stations in Scribner and Decatur, for allegedly selling ethanol-blend gasoline at the higher unleaded price.

In Mississippi, AG Jim Hood announced a guilty plea on the part of Randy I. Koenenn, operator of Kodie's Junction in Kiln, for violating the state's Petroleum Products Inspection Law after an inspection found that Koenenn was filling his gasoline holding tanks with 87 octane gasoline and selling it through his 89 octane and 93 octane pumps.

And in Texas, AG Greg Abbott took legal action against Petroleum Wholesale LP after an investigation by the Texas Department of Agriculture found that The Woodlands-based company's Sunmart gas stations routinely failed to pump the amount of fuel its customers actually purchased.

(Click here for CSP Daily News coverage on AG actions in Iowa, Nebraska and Mississippi. Andclick here for coverage of AG actions in Texas.)