Stop Disaster Price Gouging Act
The Stop Disaster Price Gouging Act would make price gouging during a declared major disaster or emergency a prohibited unfair or deceptive practice, enforced primarily by the Federal Trade Commission (FTC). It creates specific temporary price controls on essential goods and services (including hotel lodging, residential rents, and repair/reconstruction work) within the disaster area after the President declares a major disaster or emergency under the Stafford Act. The bill also provides enforcement tools: FTC authority, state attorney general actions, private rights of action, and civil penalties. It includes several exceptions (e.g., cost-based increases tied to supplier costs or tariffs, seasonally adjusted hotel rates, and certain rental cost adjustments) and directs penalties and any recovered funds to disaster-affected communities. Definitions expressly focus on items deemed essential for survival and recovery. In short, the bill aims to curtail rapid price increases in the immediate aftermath of disasters, while preserving limited, narrowly defined justifications for price changes and establishing a multi-pronged enforcement framework that involves federal, state, and private-sector remedies.
Key Points
- 1Prohibition scope and period
- 2- After a President-declared major disaster or emergency under the Stafford Act, within the disaster area, a person may not raise prices on essential goods/services, hotel lodging, or residential rentals by more than 10% above the day-before date for 30 days, and may not charge for repair/reconstruction services at more than 10% above those costs plus customary markup for 180 days.
- 3Additional price cap and enforcement basics
- 4- A separate rule prohibits charging more than 50% above the pre-disaster cost for essential goods/services for 30 days after the declaration if the higher price was not charged before the disaster.
- 5- The FTC enforces these provisions as unfair or deceptive practices under the FTC Act, with penalties and remedies aligned to FTC enforcement.
- 6Exceptions to the caps
- 7- Increases attributable to actual additional costs paid to suppliers or labor/materials, and not more than 10% above total cost plus customary markup, or increases due to tariffs/national trade policies.
- 8- Seasonal, regularly scheduled hotel rate adjustments.
- 9- Rental rate increases due to repairs/additions beyond normal maintenance amortized over the term or if contractually agreed prior to the disaster.
- 10Enforcement and remedies
- 11- Federal: FTC enforcement rights, including penalties and the same enforcement mechanisms as other FTC Act provisions.
- 12- States: State attorneys general can sue to enjoin, enforce, seek damages or restitution, with FTC notice and potential federal intervention.
- 13- Private right of action: Individuals harmed by violations can sue for injunction, actual damages, or both; willful violations can merit up to triple damages; court costs and attorneys’ fees may be awarded; actions must be brought within 2 years of discovery.
- 14- Penalties: Civil penalties up to $25,000 per violation, with a maximum total liability of $25,000 for all violations arising from the same or related acts; inflation adjustments begin after the first year post-enactment.
- 15- Funds recovered are directed to a disaster-affected communities fund.
- 16Definitions and scope
- 17- Essential goods/services include food and drink, emergency supplies, medical supplies, home heating oil, building materials, transportation, freight, storage services, and motor fuels.
- 18- The Act does not preempt state law that does not conflict with it.