Attorney General Brown Vows To Investigate Price Gouging

Wednesday, October 24, 2007
Contact: (415) 703-5837, agpressoffice@doj.ca.gov

LOS ANGELES -- California Attorney General Edmund G. Brown Jr. today announced that the Department of Justice is prepared to investigate and prosecute businesses that attempt to “wrongfully profit” from the devastating fires that have swept Southern California.

“It is illegal to exploit the state of emergency for personal gain,” said Brown.

Brown pointed out that California’s anti-price gouging statute, Penal Code Section 396, became immediately effective after the state of emergency was declared on Sunday, October 21, 2007. Brown issued a warning to those who might try to illegally raise prices for goods, services, or hotels.

“Fires have ravaged communities across Southern California,” Attorney General Brown said, “and the state’s anti-price gouging law is now in full force. Anyone who tries to wrongfully profit from the suffering of others will be investigated by the California Department of Justice.”

Penal Code Section 396 prohibits charging a price that exceeds, by more than 10%, the price of an item before the declaration of emergency. This law applies to those who sell food, emergency supplies, medical supplies, building materials, and gasoline. The law also applies to repair or reconstruction services, emergency cleanup services, transportation, freight and storage services, and housing and hotel accommodations.

Violations of the price-gouging statute are subject to criminal prosecutions which can result in one year imprisonment in county jail or a fine of up to $10,000. Violators are also subject to civil enforcement actions including civil penalties, injunctive relief and mandatory restitution.

The attorney general will coordinate any prosecutions with local district attorneys’ offices when violators should be prosecuted locally.

Consumers who believe they have been victimized by price gouging should immediately file a written complaint with the Attorney General's Public Inquiry Unit: http://ag.ca.gov/contact/complaint_form.php?cmplt=CL or by calling (800) 952-5225.

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