RICHMOND, Va. -- Attorney General Judith Williams Jagdmann has announced a settlement that her office has entered with Zafarallah Khan, the owner/proprietor of Discount Tire & Gas, a gas station located in Falls Church, Va.
The settlement, which takes the form of an assurance of voluntary compliance, relates to allegations that Discount Tire & Gas violated the Virginia Post-Disaster Anti-Price Gouging Act (VPDAPGA) by charging "unconscionable" prices for gasoline after the governor declared a state of emergency following Hurricane Katrina. The [image-nocss] settlement has been filed with the Circuit Court of Fairfax County for approval.
This settlement sends a strong message that this Office will protect consumers by enforcing Virginia's Anti-Price Gouging Act, said Jagdmann.
The bill of complaint filed along with the assurance alleges that certain prices Discount Tire & Gas charged on September 2 and 3 were unconscionable because they grossly exceeded the prices this gasoline retailer charged during the 10 days immediately prior to the time of disaster. After a state of emergency was declared by the governor, the retailer gradually increased its prices by up to 53% more than the pre-disaster price, the AG said.
The Office of the AG and the Virginia Department of Agriculture & Consumer Services (VDACS) received several complaints from Virginia consumers concerning gasoline pricing. On September 3, VDACS' Division of Consumer Protection sent an inspector to Discount Tire & Gas to investigate after receiving one or more complaints about the prices being charged at its location. The bill of complaint alleges that, by charging the following prices for gasoline on September 2 and 3: Regular ($3.799, $3.899, $4.399 and $4.599), Midgrade ($3.899, $3.939, $4.499 and $4.699) and Premium ($3.989, $3.999, $4.599 and $4.799), Discount Tire & Gas charged unconscionable prices for necessary goods during a time of disaster in violation of the VPDAPGA.
The settlement enjoins Discount Tire & Gas from engaging in any of the practices alleged to be violations of the VPDAPGA and the Virginia Consumer Protection Act and requires it to set aside $700 for consumer restitution. This amount is based on sales transaction receipts Discount Tire & Gas provided identifying the individual gasoline transaction or shift sales made on September 2 and 3 at the prices deemed unconscionable.
Assuming the settlement is approved by the court, Discount Tire & Gas will be required to provide notice to its customers that they may be eligible for restitution by posting signs on its front door, the window of the station and on each individual gas pump. The settlement requires Discount Tire & Gas to make individual refunds if a consumer has proof of a gasoline purchase from it on September 2 or 3 at a price of $3.799/gallon or higher, and where the amount of restitution required to be issued to the consumer is more than $2.
The settlement also requires Discount Tire & Gas to pay $2,000 to reimburse the AG's Office for its costs and attorney's fees in this matter.
Finally, the settlement requires Discount Tire & Gas to make a contributionas in Illinois (see related story in this issue of CSP Daily News)of $1,500 to the American Red Cross Hurricane Katrina Relief Fund. This payment is in lieu of a payment of civil penalties.
The AG noted that Zafarallah Khan dba Discount Tire & Gas cooperated with her office and with the VDACS throughout the investigation.
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