Shoppers say there is price gouging, the law and what you can do

10 PRICE GOUGING COMPLAINTS-

KHON2 has received multiple reports from shoppers who noticed higher prices at certain stores. Some say a case of bottled water is selling for $40.

According to Office of Consumer Protection (OCP) Executive Director Bruce Kim, there is a price cap in effect for commodities in conjunction with Gov. Neil Abercrombie’s disaster declaration.

The statewide emergency has triggered statutory price caps on selling prices at pre-emergency levels for all commodities, including food, water, ice, gasoline, cooking fuel, batteries, and generators. Any price increase of these and other commodities since severe weather warnings began through at least Aug. 16, 2014, is a violation of state law and merchants found in violation may be subject to severe fines and penalties.

“The Office of Consumer Protection will investigate complaints and prosecute any offenders to the fullest extent of the law,” Kim said. “It is also important for consumers to follow through with providing the information.”

If merchants have unknowingly raised prices during this period, they may avoid a violation by rolling back prices to the appropriate level and putting a restitution program in place to return any excessive payments resulting from the illegal price increases to consumers.

If consumers believe they paid increased prices for merchandise, they are advised to keep their receipts and/or other records of the sale, and report any instances of price gouging by emailing ocp@dcca.hawaii.gov.

Include:

  • Name of business
  • Location of business – island, area
  • What was being purchased, any additional info on the item
  • Name and contact number of caller if they are willing

During normal work hours consumers can call the DCCA’s Consumer Resource Center (CRC) between 7:45 a.m. and 4:30 p.m. Mon-Fri by calling 587-4272 or 587-3295 from Oahu, or from the Neighbor Islands call the following numbers followed by 7-4272 and the # sign:

  • Kauai 274-3141
  • Maui 984-2400
  • Hawaii 974-4000
  • Lanai & Molokai 1-800-468-4644 (toll free)

During regular business hours, consumers may call 808-587-4272 at the Consumer Resource Center to obtain a complaint form and file a formal complaint.

We originally posted the HRS §209-9, which was amended into a new statute with a few changes. The new law went into effect after being signed by the governor on 6/20/2014 and became law on 7/1/2014.

The changes added the ability for the mayors’ declaration(s) to evoke the prohibitions and adds definitions for clarity of rental and lease agreements. The price gouging portion of the law did not change.

Below is the amended statute (Act 111 6/20/2014):

§-30 Rental or sale of essential commodities during a state of emergency; prohibition against price increases.

(a) Whenever the governor declares a state of emergency for the entire State or any portion thereof, or a mayor declares a local state of emergency for the county or any portion thereof, or when the State, or any portion thereof, is the subject of a severe weather warning:

(1) There shall be prohibited any increase in the selling price of any commodity, whether at the retail or wholesale level, in the area that is the subject of the proclamation or the severe weather warning; and

(2) No landlord shall terminate any tenancy for a residential dwelling unit in the area that is the subject of the proclamation or the severe weather warning, except for a breach of a material term of a rental agreement or lease, or if the unit is unfit for occupancy as defined in this chapter; provided that:

(A) Nothing in this chapter shall be construed to extend a fixed-term lease beyond its termination date, except that a periodic tenancy for a residential dwelling unit may be terminated by the landlord upon forty-five days’ written notice:

(i) When the residential dwelling unit is sold to a bona fide purchaser for value; or

(ii) When the landlord or an immediate family member of the landlord will occupy the residential dwelling unit; or

(B) Under a fixed-term lease or a periodic tenancy, upon forty-five days’ written notice, a landlord may require a tenant or tenants to relocate during the actual and continuous period of any repair to render a residential dwelling unit fit for occupancy; provided that:

(i) Reoccupancy shall first be offered to the same tenant or tenants upon completion of the repair;

(ii) The term of the fixed-term lease or periodic tenancy shall be extended by a period of time equal to the duration of the repair; and

(iii) It shall be the responsibility of the tenant or tenants to find other accommodations during the period of repair.

(b) Notwithstanding this section, any additional operating expenses incurred by the seller or landlord because of the emergency or disaster or the severe weather, and which can be documented, may be passed on to the consumer. In the case of a residential dwelling unit, if rent increases are contained in a written instrument that was signed by the tenant prior to the declaration or severe weather warning, the increases may take place pursuant to the written instrument.

(c) The prohibitions under subsection (a) shall remain in effect until twenty-four hours after the severe weather warning is canceled by the National Weather Service; or in the event of a declaration, the later of a date specified by the governor or mayor in the declaration or ninety-six hours after the effective date and time of the declaration, unless such prohibition is continued by a supplementary declaration issued by the governor or mayor. Any proclamation issued under this chapter that fails to state the time at which it will take effect, shall take effect at twelve noon of the day on which it takes effect.

(d) In any action against a merchant, landlord, or other business for violation of the price limitations in this section, the defendant shall be deemed not to have violated this section if the defendant proves all of the following:

(1) The violation of the price limitation was unintentional;

(2) The defendant voluntarily rolled back prices to the appropriate level upon discovering that this section was or may have been violated; and

(3) The defendant has instituted a restitution program for all consumers who may have paid excessive prices.

(e) Any violation of this section shall constitute unfair methods of competition and unfair and deceptive acts or practices in the conduct of any trade or commerce under section 480-2 and shall be subject to a civil penalty as provided in section 480-3.1. Each item sold at a price that is prohibited by this section shall constitute a separate violation.

(f) As used in this section:

“Breach of a material term” means the failure of a party to perform an obligation under the rental agreement or lease, which constitutes the consideration for entering into the contract and includes the failure to make a timely payment of rent.
“Commodity” means any good or service necessary for the health, safety, and welfare of the people of Hawaii; provided that this term shall include, but not be limited to: materials; merchandise; supplies; equipment; resources; and other articles of commerce that shall include food; water; ice; chemicals; petroleum products; construction materials; or residential dwellings.
“Fixed-term lease” means a lease for real property that specifies its beginning date and its termination date as calendar dates, or contains a formula for determining the beginning and termination dates; and the application of the formula as of the date of the agreement will produce a calendar date for the beginning and termination of the lease.
“Periodic tenancy” means a tenancy wherein real property is leased for an indefinite time with monthly or other periodic rent reserved. A periodic tenancy may be created by express agreement of the parties, or by implication upon the expiration of a fixed-term lease when neither landlord nor tenant provides the other with written notice of termination and the tenant retains possession of the premises for any period of time after the expiration of the original term.
“Unfit for occupancy” means that a residential dwelling unit has been damaged to the extent that the appropriate county agency determines that the unit creates a dangerous or unsanitary situation and is dangerous to the occupants or to the neighborhood.

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