Attorney General William Tong announced on Wednesday that he will seek new legislation to fight price gouging in Connecticut.
During civil preparedness and public health emergencies, price gouging is against Connecticut law.
Acting in coordination with the Dept of Consumer Protection, Tong’s office may file suit against price gougers and seek appropriate relief, including injunctive terms, restraining orders, restitution, and civil financial penalties designed to deter future unscrupulous sales.
While Tong’s office received over 750 Covid-related price gouging complaints last year, limits in existing price gouging statutes curtailed the state’s ability to crack down on some of the worst actors that sought to take advantage of severe shortages in protective equipment and essential goods.
Three shortcomings limited the statute’s effectiveness: it applies only to retail sales; it does not adequately define price gouging; and it does not clearly state that it applies to leases and rental items.
New legislation sought by Tong seeks to address each of those shortcomings and strengthen the state’s ability to protect consumers.
“Profiteering off pain and panic during a crisis is wrong, and against the law. We are seeking new legislation to strengthen our ability to hold price gougers accountable and protect consumers,” said Attorney General Tong in a release. “We received over 750 Covid-related price gouging complaints last year, and thoroughly reviewed each and every one.”
Tong said complaints are about “massive” price increases on essential and life-saving items like masks, sanitizer and even toilet paper.
“It became clear early on that the existing price gouging statute was severely limited and did not adequately protect families and businesses,” he added. “I look forward to working with the legislature this session to reform the statute and strengthen our ability to combat price gouging behavior.”
“Many people have come upon hard times this past year and to take advantage of others when it comes to essential items is just unethical,” said State Sen. James Maroney in the release. “This legislation will ensure that if there is a spike in items that are in demand, no retailer or seller will be able to charge unfair prices. There will be repercussions for those who continue to increase prices on items that become commodities in the state.”
“During a time when our communities are reeling from the ongoing COVID-19 pandemic, the last thing residents should have to worry about is being ripped-off for trying to keep their families safe,” said Rep. D’Agostino. “I commend Attorney General Tong for his office’s diligent work reviewing all 750 Covid related price gouging complaints, but now it’s time to strengthen our laws so that the AG can crack down further on these bad actors.”
“Connecticut hospitals are on the front lines in the battle to diagnose, treat, and prevent the spread of Covid-19. Price gouging related to personal protective equipment and other types of medical goods and services during this public health emergency threaten the health and safety of healthcare providers and patients. Such unconscionable business acts stand to impede the ability of hospitals and other care providers to safely and effectively respond to the global pandemic. CHA and Connecticut hospitals support every effort to protect our medical providers and to ensure that they have reasonable access to all forms of necessary medical supplies and essential goods and services,” said Carl Schiessl, Senior Director, Regulatory Advocacy at the Connecticut Hospital Association. “We are so appreciative that Attorney General Tong, Senator Maroney, and Representative D’Agostino are leading this effort to modernize state law. We support holding profiteers accountable as their actions exploit the healthcare providers and citizens of our state. This legislation is a step toward that accountability.”
The proposed legislation addresses three core shortcomings in the existing statute:
Expanding Beyond Retail: The state’s current price gouging statute only applies to retail sales, excluding wholesale and sales within the supply chain. During the pandemic, many state investigations of alleged price gouging behavior revealed that although the retail price of the item in question had increased, sometimes dramatically, the retail seller was not responsible for that increase. Rather, the cost of the item charged by the wholesaler to the retailer had increased, forcing the retailer to raise the price at the point of sale. In many cases, Connecticut retailers reduced their normal mark-ups in an effort to keep retail prices lower. Amending the price gouging statute to apply up and down the entire supply chain will better protect consumers by expanding and strengthening our ability to combat price gouging behavior.
Clearly Defining Price Gouging Behavior: The current price gouging statute defines price gouging as an increase in “the price of any item” during a declared emergency, unless the increases are due to, “fluctuation[s] in the price of items sold at retail which occur during the normal course of business.” This language does not offer clear guidance to consumers, businesses, or the Office of the Attorney General as to what may constitute price gouging behavior that is prohibited in Connecticut. The proposed legislation would define price gouging to prohibit the sale of certain goods or services “for an amount which represents an unconsciously excessive price.” This language mirrors language regarding energy resources during emergencies, and also matches language in New York’s price gouging statute.
Including Rentals and Leases: While the current statute states that “[n]o person, firm or corporation shall increase the price of any item,” questions remained as to whether it applied only to items sold or whether it also applied to rentals and leases. The proposed legislation would clarify the applicability of the statute here, joining other states that specify it is unlawful to rent or lease products and services at an unconscionable price.
Attorney General Tong will testify in favor of the proposed legislation before the General Law Committee of the Connecticut General Assembly at 9:30am on Thursday, January 28.