Motels Settle Ice Storm Price Gouging Allegations

Attorney General Spitzer today announced that two Ontario County motels will pay more than $8,800 to settle allegations of price gouging during an ice storm earlier this year.

The Relax Inn of Route 14 in Phelps and the Best Value Inn of Route 96 in Farmington both settled allegations that they violated the state's price gouging law by increasing their rates for rooms solely due to the increased demand caused by a state of emergency.

"It is unconscionable that anybody should try to profit from a state of emergency that forced families from their homes seeking basic necessities such as heat and hot water after a winter storm," Spitzer said.

On April 3, 2003, a state of emergency was declared in Monroe, Ontario, Wayne and other surrounding counties due to an ice storm that left over an inch of ice and caused extensive damage and power outages.

The loss of electric power, which residents were warned could last several days, left many individuals seeking refuge in nearby hotels and motels that were not affected by the power outage. In fact, some families waited at least a full week for power to be restored in their homes.

During the weeks that followed, Spitzer's office received complaints that both the Relax Inn and the Best Value Inn gouged them for hotel rooms during the state of emergency.

In settling the cases, the motel operators agreed to pay a total of $2,324 in refunds to approximately 80 consumers for the overcharges. The Relax Inn and the Best Value Inn also paid a total of $7,500 in civil penalties and costs.

New York State law prohibits price gouging during a state of emergency. The law prohibits charging unconscionably excessive prices in order to prevent any party from taking unfair advantage of consumers during an abnormal disruption of the market.

This law applies to consumer goods and services vital and necessary for the health, safety and welfare of consumers, and applies to all parties in the chain of distribution, including retailers, manufacturers, suppliers, wholesalers, and distributors. It covers basic consumer goods such as milk and bread as well as other important items and services such as generators, emergency home repairs, and hotel accommodations.

These cases were handled by Assistant Attorney General Carlos Rodriguez of the Rochester Regional Office.


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