Texas AG sues three businesses for alleged Harvey price gouging

AUSTIN, TX (KXAN) — In separate lawsuits filled this week, Attorney General Ken Paxton says amid stories of compassion and heroism after Hurricane Harvey, consumers began contacting his office to report “excessive and exorbitant” prices on everything from water and gas to hotel lodging.

Now, three Texas businesses are facing lawsuits from Paxton for alleged price gouging at a hotel and gas stations. One of those businesses was a Best Western at the center of a KXAN investigation that ended up losing its franchise.

“Before the storm even made landfall, consumers trying to prepare for the imminent devastation seeking to buy necessities such as water faced prices of $40-50 per case and those seeking emergency lodging were forced at some hotels to pay nearly triple their customary rate,” the lawsuit alleges. “After the storm, some gas stations exploited the fear of gas shortages by more than doubling their prices – in some instances charging $6-10 per gallon.”

Under Texas law, vendors cannot charge excessively for necessities such as food, water, clothing or fuel. So far the Consumer Protection Division of the attorney general’s office received 3,321 price gouging complaints related to Hurricane Harvey.

The first business facing a lawsuit is Robstown Enterprises, Inc., which was doing business as Best Western Tropic Inn. The suit claims the business tripled its normal room rate when Harvey hit. A KXAN crew stayed at the hotel and confronted a clerk about the price increase when they checked out Aug. 27. KXAN shared a copy of the invoice with the attorney general later that day. That night, the hotel refunded 40 customers. Best Western severed ties with the hotel Aug. 29.

Two Bains Brothers-owned Texaco gas stations in the Dallas-Fort Worth area allegedly displayed signs with prices in the $3-$4 range but charged $6.99 a gallon for regular unleaded gas on Aug. 31.

“Another customer began fueling only to discover that 12 gallons cost her $85.00, far in excess of the $4.29 per-gallon price advertised,” the lawsuit alleges. “After requesting a reimbursement for the price difference, she was told by the clerk ‘it is what it is.’”

Customers at the Chevron-branded Encinal Fuel Stop outside of Laredo were allegedly charged $8.99 and $9.99 per gallon for regular unleaded gas on Aug. 31

If businesses are found to have price gouged customers, they may have to pay civil penalties up to $20,000 for each violation, plus an additional amount of up to $250,000 for victims who were older than 65.

“It’s unconscionable that any business would take advantage of Texans at their most vulnerable – those who are displaced from their homes, have limited resources, and are in desperate need of fuel, shelter and the basic necessities of life,” Paxton said in a release. “Texas has tough price gouging laws, and my office will continue to aggressively investigate and prosecute cases arising from Hurricane Harvey.”

Texans who believe they may have been scammed or price-gouged can call the Consumer Protection Hotline at 800-621-0508, email consumermemergency@oag.texas.gov, or file a complaint online at the attorney general’s website.