Ice Storm Price Gouging Victims To Receive Refunds

Attorney General Spitzer today announced refunds for price gouging victims during the 1998 ice storm in the North Country.

Beach Boys Equipment Company, Inc., which does business as Beachy's, and has stores located in Syracuse and New Hartford, agreed to refund nearly $20,000 to approximately 25 consumers who were forced to pay as much as twice the retail price for Devilbiss brand generators during the ice storm. During the ice storm's aftermath, Beachy's charged as much as $1,300 for 5000 watt generators and $2,200 for 7000 watt generators. The full retail price of these generators should have been only $600 and $1,400, respectively.

"This agreement ensures that all consumers who were compelled to pay exorbitant prices for generators necessary to provide emergency power due to critical weather conditions finally will be reimbursed," Spitzer said. "It also demonstrates that my office is committed to enforcing the price gouging law to the fullest extent possible."

This settlement resolves two years of litigation in which the Jefferson County State Supreme Court initially determined that Beachy's had engaged in price gouging and ordered Beachy's to reimburse all 25 consumers who had been overcharged for generators. Earlier this year, the decision was affirmed by the Appellate Division, Fourth Department, and modified to grant Spitzer's request for mandatory penalties for the company's violation of the price gouging law. The Court held, however, that Beachy's did not have to reimburse three consumers who had purchased the 7000 watt Devilbiss generators.

After the Appellate Division decision, Spitzer's office was successful in convincing Beachy's to agree to a settlement that provides refunds representing the increased cost paid plus 9% interest to all consumers who overpaid for generators.

The price gouging statute was enacted to protect consumers in times of emergency situations where disruptions in the marketplace substantially limit competition. This law protects the public by prohibiting sellers from taking advantage of the crisis by charging excessively high prices which do not reflect the customary value of the item.

Beachy's also agreed to pay civil penalties of $3,500 for their violation of the price gouging statute.

This case was handled by Assistant Attorney General Leslie B. Neustadt and Associate Attorney Robert Vawter of the Consumer Frauds and Protection Bureau.

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