Hundreds of thousands of Arkansans remain without power following this week's ice storm, which snapped trees and power lines causing them to hit homes and businesses across the northern part of the state. In the wake of such devastating damage, Attorney General Dustin McDaniel issued this consumer alert to warn consumers about price gouging and rebuilding and recovery scams.
Price gouging occurs when a business charges substantially more for necessary goods or services than the regular selling price. Following the terrible tornadoes of 1997, Act 376 was passed to prohibit sellers for goods and services that are necessary to address the emergency from price gouging by putting a general 10 percent cap on price increases. The law goes into effect for at least 30 days whenever a state of emergency is declared by the governor or the president. Arkansas is under a state of emergency, currently, and the Public Protection Department of the Arkansas Attorney General's Office has already received complaints of price gouging.
"Natural disasters bring enough tragedy to Arkansas' families and it is important that people know the law so that they can prevent a bad situation from becoming worse," Attorney General Dustin McDaniel said.
In addition to price gouging, victims of this winter weather disaster should be on the lookout for individuals trying to turn a hefty, often illegitimate, profit on clean-up and rebuilding efforts.
For those who are planning contract work for damage repair or even debris removal, McDaniel offers the following tips to help avoid getting scammed:
* Comparison Shop -- Don't accept the first quote you are given and try to avoid "drive-by" offers from door-to-door solicitors.
* Know who you are dealing with -- Be wary of individuals who claim to be authorized by the city or county to clean up debris to trim tree limbs. In the past, consumers who permitted clean-up by supposedly authorized individuals did not expect to be charged for the work but ended up getting stuck with big bills later. Check with your local officials about county or city clean-up efforts and, generally, don't do business without getting the company's background information first. Usually, you can review a business's track record through the Better Business Bureau (www.bbb.org).
* Put it in writing -- When you are prepared to enter into a contract, put it in writing and don't be afraid to spell out exactly what you want done and how you want it done.
* Don't pay in advance -- Insist on paying for the services after they have been completed to your satisfaction and never hand over a large amount of money up front.
For those who believe they have been victimized by price gouging or contractor related scams, contact the Public Protection Department of the Attorney General's Office at 501-682-2341 or 1-800-482-8982.