SPECIAL CONSUMER ALERT: LAWS PROTECT ARKANSAS CONSUMERS DURING WINTER STORMS

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December 06, 2013

LITTLE ROCK – With a major winter storm bearing down on most of Arkansas, Attorney General Dustin McDaniel issued this special consumer alert today to remind Arkansas consumers of the protections they have when buying LP gas for home heating or shopping for necessary supplies during an emergency.

Gov. Beebe declared a state of emergency on Thursday. That triggered the state’s price-gouging law, which prohibits many businesses from raising prices more than 10 percent, with certain exclusions. Also, a law enacted following the 2009 ice storm would permit consumers who use LP gas to choose any provider to fill their gas tanks during a weather emergency if the primary provider is unable to do so.

“Arkansas consumers affected by major winter storms should not have to worry about the possibility of someone taking advantage of them by forcing them to pay too much for basic necessities,” McDaniel said. “And, in rural areas, disruptions in LP gas delivery could be extremely dangerous for those who may lose home heating. Arkansas residents impacted by this storm need to know about these important consumer protections.”

Price-Gouging Law

In a state of emergency, many businesses may not increase their prices by more than 10 percent. This prohibition continues for 30 days after the governor or president declares a state of emergency.

The 10-percent cap on price increases applies to most items related to storm recovery, such as food and water, batteries, fuel and construction materials.

Businesses may exceed the 10-percent cap in limited circumstances. For instance, the business must establish that the higher price is directly attributable to their own added expense, such as costs imposed by a supplier or because of higher labor and materials costs.

A violation of the price-gouging law is a violation of the state’s Deceptive Trade Practices Act. Civil penalties for violating the state’s price-gouging law can be as high as $10,000 per violation.

LP Gas Law

In most instances, consumers who use LP gas to heat their homes rent their tanks from the fuel provider. With rented tanks, the provider who owns the tank is the only entity allowed to fill the tank. When that provider is unable to make timely deliveries because of inclement weather, that can be harmful to consumers.

So, in 2009, the Legislature amended the LP gas law to permit other providers to fill a tank if the tank owner and primary provider is unable to make a timely delivery. During the 2009 ice storm, some providers shut down deliveries altogether.

The law takes effect when the governor declares a state of emergency and the Director of the Liquefied Petroleum Gas Board issues an order to invoke provisions of the law.

Regardless of the weather situation, McDaniel recommended that LP gas customers consider owning their own tanks. In that circumstance, tanks can be filled by any provider at any time. This also allows consumers to shop around for the best fuel prices.

“Storm Chasers”

Following winter storms, a few scam artists always emerge with promises of removing debris or repairing homes quickly and at a low price. These individuals, known as “storm chasers,” often demand money or anticipated insurance payments up front. They almost always fail to do the work they promised to the consumer’s satisfaction.

Part of the Attorney General’s legislative agenda this year was a bill to crack down on storm chasers. Act 1360 of 2013 allows consumers to cancel a home-repair contract funded by an insurance claim if the insurance company denies all or part of the claim that would have paid for the repair.

When dealing with any contractor during storm recovery, consumers should remember never to pay for the entire cost of a repair in advance, McDaniel said. Make sure the terms of any contract are in writing. Also, check with friends and family, the Better Business Bureau and the Arkansas Contractors Licensing Board before choosing a home-repair contractor.

For more information about consumer protection during and after a winter storm, visit the Attorney General’s Consumer Protection Division website,  www.GotYourBackArkansas.org, or call the Consumer Protection Hotline, (800) 482-8982.

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