NJ Hotels Sued for Post-Sandy Price Gouging

State A.G. accuses 5 hotels & a gas station of rises prices on Sandy victims

By Ted Greenberg and Dan Stamm
|  Wednesday, Dec 19, 2012  |  Updated 10:01 PM EDT
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Five hotels and a gas station are being sued by the state of New Jersey for alleged price gouging after Hurricane Sandy. Authorities say they illegally raised their rates for people forced to leave their homes. NBC10's Ted Greenberg went to teo hotels to ask why.

NBC10 Philadelphia - Ted Greenberg

Five hotels and a gas station are being sued by the state of New Jersey for alleged price gouging after Hurricane Sandy. Authorities say they illegally raised their rates for people forced to leave their homes. NBC10's Ted Greenberg went to teo hotels to ask why.

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New Jersey is taking action to hold businesses accountable for alleged price gouging after Superstorm Sandy.

Five hotels and a gas station were the latest to be sued by the state hiking prices after the storm. Authorities say they illegally raised their rates for people forced to leave their homes.

The Howard Johnson and Econo Lodge, both on the Black Horse Pike in Egg Harbor Township, are two of the hotels accused of price gouging, according to the New Jersey Attorney General’s Office.

“We allege that these hotel owners broke our price gouging law, at a time when vulnerable consumers desperately needed the most basic of necessities -- shelter,” Attorney General Jeffrey Chiesa said. “There is no excuse, legally or morally, for businesses trying to gouge consumers in the aftermath of a widespread disaster, and we are holding them accountable.”

The A.G.’s office says that Howard Johnson is accused of hiking room rates 58 percent from $75 to $119 at least 52 times. The Econo Lodge is accused of hiking prices even higher by increasing rooms from $75 to $199.99 (150 percent) a total of 545 times.

NBC10’s Ted Greenberg searched for comment from the Econo Lodge.

“Were these rates fair?” Ted asked.

A man at the hotel who identified himself as an adviser and friend of the operators spoke on their behalf. “We don’t want to answer that right now. We think that whatever we did was fully in compliance with everything.

“There are reasons why some of the prices were up. There are more people in the room compared to what we normally would have.”

In most cases, state law forbids prices to be hiked more than 10-percent during a state of emergency. These six new businesses put the total amount of businesses accused of price gouging after Sandy at 24, according to the A.G.

The owner of the Howard Johnson said that they didn’t do anything illegal. She said the only reason rates went up was because more people than normal were staying in certain rooms..

Fines start at $10,000 for a first offense and the state also wants the businesses to pay restitution to storm victims who investigators say were charged way too much.

“If the Attorney General’s Office determines that we have to give money back, then we will give them the money back,” the adviser to the Econo Lodge said.

 


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