NEWARK – Acting Attorney General John J. Hoffman and the New Jersey Division of Consumer Affairs today announced that Amy Hotels, LLC, d/b/a “Econo Lodge” (“Amy Hotels”) in Egg Harbor Township, has agreed to pay $64,543.96 to resolve the State’s allegations that the hotel engaged in 545 instances of unlawful price gouging in the wake of Superstorm Sandy.
“New Jersey’s laws specifically prohibit price gouging for needed commodities during a declared state of emergency,” Acting Attorney General John J. Hoffman said. “This settlement, and the many other victories we have obtained against alleged Superstorm Sandy price-gougers, should deter other businesses from violating this law in the future.”
To date, the Division of Consumer Affairs, with the assistance of the Division of Law, has resolved 23 of 27 lawsuits filed against hotels, gas stations, and other businesses accused of price gouging during the Superstorm Sandy state of emergency. With the settlement announced today, the State will have obtained a total of $1,080,702.64 in civil penalties, consumer restitution, and the reimbursement of the State’s attorney’s fees and investigative costs, as a result of these enforcement actions.
“Flooding, power outages, and even the complete destruction of their homes left many New Jerseyans in desperate need of a place to stay during Sandy’s aftermath,” Division of Consumer Affairs Acting Director Steve Lee said. “Some hotels took advantage of that need through unlawful price gouging, and now they will be held responsible.”
Amy Hotels, at 6641 Black Horse Pike in Egg Harbor Township, will pay $64,543.96 including $24,995.64 in consumer restitution, $25,000 in civil penalties, and $14,547.82 in reimbursement of the State’s attorneys’ fees and investigative costs. An additional $25,000 in civil penalties is suspended but will become payable if the business violates the terms of the settlement within one year.
Governor Chris Christie declared a state of emergency on October 27, 2012, in advance of Sandy’s landfall. The State’s complaint, filed in December 2012, alleges that Amy Hotels raised its room rates to various excessive amounts immediately thereafter. From October 27, 2012 through November 5, 2012, the hotel allegedly engaged in 545 instances of unlawful price gouging. The hotel allegedly increased its room rates by as much as 150 percent, or to $199.99 per night for a room that was normally priced at $79.99 per night prior to the state of emergency.
New Jersey’s price gouging statute, N.J.S.A. 56:8-107, et seq., prohibits excessive price increases during a declared state of emergency for merchandise used as a direct result of an emergency or used to protect the life, health, safety, or comfort of persons or their property.
The law defines excessive price increases as more than 10 percent above the price at which merchandise was sold during the normal course of business immediately prior to the state of emergency. If a merchant incurs additional costs during the state of emergency, prices may not exceed 10 percent above the markup from cost applied in the usual course of business prior to the state of emergency.
Investigator Michelle Davis of the Division of Consumer Affairs Office of Consumer Protection conducted this investigation.
Deputy Attorney General Jeffrey Koziar, of the Consumer Fraud Prosecution Section within the Division of Law, represented the State in this action.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the State Division of Consumer Affairs by visiting its website, www.NJConsumerAffairs.com, or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.