This time a year ago, thousands of Pennsylvania and New Jersey residents were dealing with the aftermath of Hurricane Sandy. Some had hunkered down in hotel rooms immediately after the storm because their homes were damaged or dark.
Some people who sought shelter at America's Best Value Inn near Phillipsburg will be getting refunds following allegations that they were taken advantage of through price gouging.
OM Dutt LLC, which does business as America's Best Value Inn in Pohatcong Township, had been sued by New Jersey authorities who alleged the hotel illegally raised rates following the deadly storm.
The hotel on Route 22 was accused of charging excessive prices for rooms 42 times during the state-declared emergency period, according to the lawsuit by the New Jersey attorney general's office and division of consumer affairs.
The hotel denied the allegations and did not admit wrongdoing in a settlement announced last week.
But it agreed to reimburse customers a total of $1,972 within the next month. I was unable to determine if any Lehigh Valley residents were among those guests, as the settlement does not identify them.
The hotel also will pay $7,909 in fines and costs. Another $40,000 in penalties was suspended because the hotel said it could not afford to pay the entire amount, according to the settlement.
The hotel and its attorney did not return my calls.
In court papers, the hotel argued that if any excessive prices could be proven, they were due to additional costs the hotel faced during the trying time and therefore were permissible under New Jersey law.
Pennsylvania and New Jersey have price gouging laws that prohibit businesses from substantially raising prices when the governor declares an emergency. In Pennsylvania, businesses generally can't hike prices more than 20 percent. New Jersey generally limits increases to 10 percent.
Both states have exceptions, though, if the price charged reflects higher acquisition costs or other factors the business faced due to the state of emergency.
I received a few complaints about price gouging following the hurricane, including at a hotel, gas station and a car rental place. But the complaints didn't seem to be too widespread compared to New Jersey.
The Pennsylvania attorney general's office received 35 complaints, spokesman Joe Peters said. He would not identify the businesses but said no lawsuits have been filed or formal settlements reached.
Protests were more common in New Jersey, where Hurricane Sandy caused more devastation. Authorities there received more than 2,000 complaints about prices at gas stations, hotels and other businesses.
New Jersey authorities sued 27 businesses. Eighteen of those lawsuits have been resolved through settlements and judgments, yielding about $816,000 in restitution to customers and fines and costs to the state.
"As we work to resolve the remaining lawsuits and investigations, all businesses in New Jersey should be on notice that we will never tolerate the gouging of consumers and that we will swiftly act against those who attempt to illegally enrich themselves during a declared state of emergency," acting Attorney General John Hoffman said in a statement last week.
The statement announced settlements with several gas stations and hotels, including America's Best Value Inn outside Phillipsburg.
New Jersey authorities alleged in their lawsuit that "there was a sharp percentage increase in the price of many of the rooms in the hotel as consumers who had been displaced by Sandy sought shelter and basic essentials."
Authorities alleged rooms that cost $80-a-night before the storm cost between $90 and $350 afterward; rooms that cost $90 before the storm cost between $100 and $150 afterward; and rooms that cost $300 before the storm cost between $350 and $520 afterward.
The suspended $40,000 fine will be waived in two years if the hotel adheres to the terms of the settlement, which include not committing unfair or deceptive acts or selling rooms at excessive prices during a state of emergency or immediately afterward.
The New York attorney general also sued dozens of businesses over alleged price gouging following Hurricane Sandy. It said last week those cases have resulted in 44 gas stations paying about $300,000 in penalties and costs.
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