WASHINGTON, D.C. – May 27, 2013 – (RealEstateRama) — As volunteers and charities like the Red Cross continue the daunting task of cleanup in Oklahoma after a chart topping tornado ripped through the state on May 21, Governor Mary Fallin has declared a state of emergency and executed a 1999 law designed to protect consumers from price gouging.
“Price gouging” is defined as a short term, localized rise on the prices of goods, commodities or services that is much higher than what would otherwise be considered fair. Gouging usually happens during times of sharp supply and demand fluctuations, of which the situation in Oklahoma is prime example.
With communities devastated and means of transportation limited, victims don’t have a lot of options in terms of where to purchase the essentials they need. With nowhere else to turn, the thinking goes, retailers may try to take advantage of consumers who have no choice but to pay the inflated prices.
This kind of behavior is seen by many as morally wrong. Many government entities agree. So after the then-record breaking tornadoes that occurred in the state in May 1999, Oklahoma passed the Emergency Price Stabilization Act that makes it unlawful for retailers to increase the cost of essential goods, commodities and services by more than 10 percent during times when an emergency or disaster is declared.
Governors have the ability to declare a state of emergency. A disaster is officially declared when a significant event does enough damage such that it cannot be reasonably or realistically handled by a state or local government alone. Requests go up the chain from local governments, to governors, to the Federal Emergency Management Agency (FEMA), and finally to the president, who approves the request declaration. Once states of emergency or declaration of disaster are made, certain funds are made available and certain statutes like the anti-price gouging law are put into place.
As of 2008, 34 states in the US have passed similar bills. The goal of these statutes is not necessarily to place unfair restrictions on businesses, but to encourage and remind business owners that they may face criminal charges for taking advantage of their neighbors and communities.
Goods and services most susceptible to price gouging attempts include things like food, water and generators, and the cost of hotel rooms, car, and truck rentals. Fuel, and things like repairs, the cost of remodeling, and construction also fall under the law’s purview.
The state Emergency Price Stabilization Act is in effect for 16 counties. Counties included in the disaster declaration are Caddo, Cleveland, Comanche, Creek, Garfield, Grant, Greer, Kiowa, Lincoln, Logan, McClain, Okfuskee, Oklahoma, Pawnee, Payne and Pottawatomie.
Once declared, the law is in effect for 180 days. Violators can be reported to the Oklahoma Attorney General’s office.