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Price-gouging cases bring few lawsuits

Settlements resolve most complaints, which is what the attorney general and GOP gubernatorial candidate prefers to see.

By STEVE BOUSQUET
Published August 15, 2006


TALLAHASSEE — As Floridians struggled to recover from eight hurricanes over the past two years, they faced a new threat from merchants making a fast buck.

Prices of gasoline, hotel rooms and even bottled water shot upward, prompting consumers to flood the state with more than 13,000 complaints of price gouging.

They called a toll-free number activated by Attorney General Charlie Crist, who promised to bring the scam artists to justice.

But Crist’s office found that fewer than one of every 100 complaints warranted a full investigation. Crist’s army of attorneys launched formal investigations in 81 cases.

Crist, who has made his aggressive stand against price gouging an important part of his profile as he runs for governor, reported collecting $1.36-million in restitution from companies accused of cheating consumers during two record-breaking hurricane seasons.

The total includes cash paid to victims and what Crist’s office calls debt reduction, cases in which state action resulted in reduced charges for services.

More than one-third of the $1.36-million total involved a single case of a billing credit to a Destin condominium association by a company accused of overcharging for water removal and mold remediation.

“It doesn’t sound like very much money,” said Bill Newton, a consumer advocate in Tampa. “But it’s hard to tell, because they’re the only ones out there really going after this stuff.”

Newton, executive director of the Florida Consumer Action Network, said Crist’s office plays an important role in discouraging businesses from ripping off the public.

“Businesses have to know that there will be penalties if they’re caught price gouging,” Newton said. “There has to be some fear of getting caught.”

Figures provided by Crist’s office show the number of price gouging complaints dropped after Hurricane Charley, the first major storm, and that the total complaints in 2005 were about half of the 2004 total.

Crist’s office cites that as evidence that his initial attack against alleged price gougers served as a deterrent.

Crist said he’s “not surprised” that most complaints were unwarranted, because emotions are running high immediately after a hurricane.

“We have to apply the law to the facts,” Crist said. “It’s just as important to prosecute the guilty as it is to exonerate the innocent.”

Crist spokeswoman JoAnn Carrin said many complaints were resolved quickly after intervention by an investigator.

She added that multiple consumers complained against the same business in many cases.

In August 2004, as Charley’s eye churned ominously toward the southwest coast, Florida already had a special toll-free number for complaints in the office of Agriculture Commissioner Charles Bronson. Chief Financial Officer

Tom Gallagher also had a “help line” for complaints about insurers or adjusters.

Crist quickly activated a toll-free hotline reserved for use mainly in emergencies (1-866-966-7226).

Most of the 13,000 complaints to Crist’s hotline were settled without expensive or time-consuming lawsuits, which is how Crist wants it. The accused businesses were allowed to settle without admitting wrongdoing.

“Good lawyers try to settle. It’s sort of an expression in law,” Crist said. “There’s a risk-benefit ratio that you have to undertake with every decision like that. I get advice from the staff in our office about what they think the best thing is to do and I usually accept it, because they’ve been in the weeds on the case.”

Of the 81 cases, 17 resulted in lawsuits. Fourteen of them were resolved with the businesses paying a total of $350,000.

Some businesses agreed to pay restitution or donate money to a relief fund for hurricane victims to avoid the stigma of being fined by the state.

Crist’s economic crimes unit collected $70,000 from a Days Inn in West Palm Beach, $40,000 from a Payless Inn & Suites in Ocala and $40,000 from a Baymont Inn in Naples. The agency also collected $25,489 in restitution from Island Food Stores of Jacksonville.

An Island Food Stores  gas station near an exit ramp off Interstate 10 in Tallahassee was accused of raising prices by 72 cents a gallon after Hurricane Katrina.

As part of the settlement, customers got $10 checks in the mail.

One recipient, Mark Newman, a bank technology officer, said the refund was a pleasant surprise.

“The office took my call and they took some action, and I got a refund,”  Newman said. “That’s a lot better than a lot of my other experiences with government.”

Newman said penalties for price gouging should be harsher. Crist agreed and said he has pushed for a law that would stiffen penalties for price gouging in emergencies.

Three other price gouging lawsuits remain unresolved and are subjects of ongoing litigation.

A suburban Orlando tree removal company, Sun State Trees & Property Maintenance, has denied Crist’s price gouging allegations and is battling them in court.

The gouging “simply did not occur,” said company attorney, Richard Whitaker of Orlando.

“There’s sort of an assumption that if someone’s charged with price gouging there must be some truth to it.”

Whitaker said hotel rooms, bottled water, generators and gasoline generally are sold at fixed prices.

But he said a tree removal service’s price depends on many factors, such as the time or number of cranes involved.
Whitaker said he is a Republican but is not involved in politics and has no animosity toward Crist for suing his client.

“He’s got a job to do,” Whitaker said.

Steve Bousquet is at (850) 224-7263 or bousquet@sptimes.com.

[Last modified August 15, 2006, 21:09:19]


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