Attorney General Tong Praises House Passage of Price Gouging Legislation(Hartford, CT) – Attorney General William Tong applauded a bipartisan 130-18 vote in the Connecticut House of Representatives passing legislation to strengthen the state’s ability to combat price gouging. The bill now heads to the Senate for consideration.
“Connecticut families and businesses deserve strong and effective legal protections against those who seek to exploit the pain and panic of a declared emergency. While we received hundreds of pandemic price gouging complaints, Connecticut’s existing statutes severely limited our ability to hold price gougers accountable. I appreciate the strong support this legislation has received in the House, and look forward to similar bipartisan support in the Senate,” said Attorney General Tong.
During civil preparedness and public health emergencies, price gouging is against Connecticut law. Acting in coordination with the Department of Consumer Protection, the Office of the Attorney General 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 the Office of the Attorney General received over 750 COVID-related price gouging complaints, limitations 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. Legislation sought by Attorney General Tong seeks to address each of those shortcomings and strengthen the state’s ability to protect consumers.
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.