BBB Tip: False advertising, price gouging is unfair, illegal

Ty AlbrightOctober 7, 2022

(BBB) — People often find that the cost of high-demand items skyrockets during times of emergencies such as ice storms, a severe cold snap, power outages, hurricanes, floods or other types of disasters. Better Business Bureau often receives reports about the frequency of scams involving sought-after items, such as face mask scams during the coronavirus pandemic, or high prices on gas, water, or hotel rooms after a natural disaster. Some state attorneys general offices have initiated state price-gouging laws, which automatically go into effect during a declared state of emergency in order to prevent businesses from over-charging customers.

Price gouging is a term referring to when a seller spikes the prices of goods, services or commodities to a level much higher than is considered reasonable or fair and is considered exploitative, potentially to an unethical extent. The best way to avoid price gouging is to plan ahead and have the necessary supplies you need on hand prior to a disaster, if at all possible.

BBB warns businesses to avoid the temptation to raise prices during a situation such as a storm or a pandemic, because it may be illegal to do so in certain states and because it erodes marketplace trust. People will remember which businesses took advantage of them.

Anyone who suspects price gouging during a declared state of emergency should report it to Better Business Bureau by filing a complaint, or go to BBB Ad Truth. Consumers have an option to report these activities to the state attorney general’s office. When reporting a price gouging complaint, gather as much information as safely possible and follow these three tips:

Be as specific about the transaction as possible, including the name and address of the business, names of any employees involved, and information detailing the spike in pricing.
Gather together documentation supporting the price gouging (receipts, photos of products and their advertised pricing, invoices, etc.)
Compare pricing of similar products with other sellers in the area as well as online. It’s important to note similarities and differences between brands, size/quantity, manufacturers, model numbers, and prices.