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Texas AG Settles With 48 Retailers on Price Gouging

Businesses to pay thousands to settle Hurricane Harvey allegations

AUSTIN, Texas -- Dozens of fuel retailers are settling with the Texas attorney general over claims they raised fuel prices higher than necessary during Hurricane Harvey.

The office of Attorney General Ken Paxton announced that the state’s Consumer Protection Division has finalized settlements with 48 gas stations, most in the Dallas-Fort Worth area, for alleged price gouging. Through their Assurances of Voluntary Compliance (AVCs), which are not admissions of guilt, the retailers will pay a combined $166,592 in civil restitution to provide refunds to customers who made claims of being charged exorbitant or excessive prices for gasoline in the aftermath of the hurricane. The highest settlement amount—$14,870—is being paid by Nandanvan One Inc., dba Old Town Store in Garland, Texas, according to a list of retailers provided by the attorney general’s office.

According to the Texas Deceptive Trade Practices Act, it is illegal for businesses to charge exorbitant prices for fuel or other necessities during a declared disaster. The law authorizes the attorney general to sue offenders for price gouging and seek refunds for consumers, as well as to enforce civil penalties of up to $20,000 per violation.

In August 2017, Texas Gov. Greg Abbott declared a state of disaster in advance of Hurricane Harvey’s approach to Texas across the Gulf of Mexico. After the hurricane, consumers began submitting complaints and allegations of gasoline price gouging, sharing receipts and photos as their evidence. The attorney general continues to investigate those claims.

For the 48 gas stations that settled with the attorney general, each had charged $3.99 per gallon or higher for gasoline or diesel. Some retailers allegedly charged up to $8.99 per gallon during the disaster declaration period, the AG's office said. In their settlements, the gas stations agreed to pay restitution to their customers and not to price gouge again. Specifically, they agreed to not raise their fuel prices by more than 25% during a disaster unless it reflects increased fuel costs.

Paxton filed lawsuits against four businesses for price gouging during Hurricane Harvey in September and November 2017. In October, the Consumer Protection Division sent notices of violations to 127 businesses. It’s not clear whether locations owned by any these businesses participated in this recent settlement agreement.

“At the outset of Harvey, I made it clear that my office would not tolerate price gouging of Texans by anyone looking to profit from the hurricane,” said Paxton. “The response to Hurricane Harvey showed the incredible generosity of Texans. These settlements should teach the few who take advantage of their fellow residents to follow the law in the future.”

Any customers of the gas stations that settled with the state who believe they were victims of price gouging during Hurricane Harvey’s disaster declaration can submit claims until Sept 10, 2018. The amount they receive will depend on how much fuel they purchased, the price they paid and how much money is available in the restitution fund.

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