Hotel rooms for $ 1,000 a night. Rising gas prices. Even bottled water prices doubling or tripling overnight.
Texas officials say the winter storm that cut off electricity and water for millions of residents is offering an opportunity for some unscrupulous traders to take advantage of the situation by charging exorbitant prices for essential supplies.
A system installed on Wednesday in Houston for residents to report incidents of price increases has received more than 450 complaints in less than 20 hours, said Harris County Attorney Christian Menefee, chief prosecutor for the largest county in Texas.
“The main kind of thing we are seeing is hotels setting prices at ridiculous rates,” said Menefee. “We saw claims of water bottles being sold for two to three times the normal price, or water bottles being divided and individual bottles being sold at excessive prices.”
Dashawn Walker, 33, looked for a hotel room Tuesday night to avoid the cold in his impotent Dallas apartment. After discovering that all rooms in Dallas were booked, he ended up driving to an extended-stay hotel in the Lewisville suburb just to pay $ 474 for one night’s stay.
“It’s crazy,” he said. “I mean, why would you go to hotels in the middle of a crisis? Like, man, let’s go now. Everyone is just trying to do this and they are capitalizing on a crisis, and it is so unfair to people that they really cannot afford it. “
These price increases are illegal under Texas law, which prohibits the sale of fuel, food, medicine, lodging, building materials or other needs “at an exorbitant or excessive price” during a state or federal disaster declaration.
The Texas Attorney General’s Office has urged residents who suspect they are victims of price increases to file a complaint with their office. Violators may be required to reimburse consumers and may face civil penalties of up to $ 10,000 per violation. Additional penalties of up to $ 250,000 can be imposed if the victims are elderly.
Dallas hotelier Larry Hamilton said that while there may be legitimate complaints about price increases, he also wondered if any complaints were without merit. He said prices at his 193-room Aloft Hotel in downtown Dallas are on average $ 94 a night, and that a customer was angry when a price of $ 109 was quoted.
“He called my general manager and was threatening to report us for fraud,” said Hamilton. “Furthermore, and this is Economy 101, the price is what creates the balance between supply and demand, and is an important regulator. Price is something that fluctuates, and it should. “
The hospitality business suffered a financial beating last year, largely because of government-imposed closures and people’s hesitation to travel during a pandemic. Hamilton, who had to close another boutique hotel in Dallas because of power outages, said hotels in the area were under 10% occupied during the pandemic.
“It was a bloodbath,” he said.
In Missouri, Governor Mike Parson said he asked the local attorney general to investigate complaints of price increases related to natural gas, which increased amid supply problems and the extreme cold wave that enveloped a wide strip of downtown and southern USA
“I realize the scarcity of fuel, natural gas or whatever, but I don’t want anyone to enjoy it either,” said Parson, adding that he found it frustrating that prices were “skyrocketing” after just a few days of very low temperatures .
“I can’t imagine what the sticker shock will be like when many people get their bills. It will be a difficult environment, ”said Parson.
In Houston, Menefee encouraged companies to take a good neighborly approach and that “we must take care of each other”. Otherwise, a visit by a state or local investigator to a company accused of price fraud is usually enough to get prices back to normal.
“If you are raising prices, it could end up on our list,” he said. “If you’re raising them to a level that really raises your eyebrows, you can count on one of our investigators knocking on your door.”
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Murphy reported from Oklahoma City. Associated Press reporters Jake Bleiberg in Dallas and Jim Salter in St. Louis contributed to this report.