Berkeley will pay out $45,000 in post-Sandy price gouging claim
Hotel allegedly increased room costs 117 percent during state of emergency
Ownership of the Berkeley Oceanfront Hotel will pay out $45,000 for allegedly hiking up rates for rooms by over 100 percent in the days after Hurricane Sandy, including an almost $6,000 payout to hotel customers, according to a news release from the New Jersey Division of Consumer Affairs.
The hotel, located at 1401 Ocean Parkway, will pay $45,000, including $5,932.50 in consumer restitution. Of the rest of these funds, $22,032.77 represents civil penalties and $17,034.73 will reimburse the State of New Jersey for attorneys’ fees and investigative costs. An additional $30,000 in civil penalties is suspended but will become payable if the business violates terms of the consent judgment within one year.
According to the original complaint, the hotel jacked up room rates by as much as 117 percent between Oct. 27, 2012 and Nov. 11, 2012, a time in which Governor Chris Christie declared a State of Emergency following the storm, allegedly engaging in a total of 280 instances of unlawful price gouging.
Two other New Jersey companies, Devsatya Inc., d/b/a “Studio Inn & Suites” of Galloway, will pay $25,000 in claims and a gas station, East Hanover Amoco Inc., d/b/a “C&M Exxon,” were ordered to pay $26,000 to resolve lawsuits that also alleged these companies engaged in hundreds of incidents of unlawful price gouging in the aftermath of the storm.
“These hotels allegedly raised their room rates by well over 100 percent of their normal prices, and this gas station increased its prices in excess of 25 percent – all at a time when a natural disaster turned the normal laws of supply and demand upside down, New Jersey families were in dire need of shelter and fuel, and price gouging was expressly prohibited due to a state of emergency,” Acting Attorney General John J. Hoffman said in the release.
“New Jersey’s Superstorm Sandy price gougers need to learn that the penalties for violating the law will far outweigh any illicit gains from taking advantage of their fellow New Jerseyans,” Acting Director Steve Lee of the Division of Consumer Affairs said in the release. “In these cases, we’re doing everything we can to bring full restitution to victims, and to deter any future attempts to take advantage of the suffering caused by a major disaster.”
To date, the Divisions of Consumer Affairs and the Division of Law have resolved 21 of the 27 lawsuits filed against businesses accused of price gouging during the Superstorm Sandy state of emergency. Including the three settlements announced today, the State of New Jersey will have obtained a total of $906,158.68 in civil penalties, consumer restitution and reimbursement of fees and investigative costs, as a result of the price gouging lawsuits.
New Jersey’s price gouging statute, N.J.S.A. 56:8-107 et seq., prohibits excessive price increases during a declared state of emergency, for merchandise used as a direct result of an emergency or used to protect the life, health, safety, or comfort of persons or their property. The law defines excessive price increases as more than 10 percent above the price at which the merchandise was sold during the normal course of business during the state of emergency. If a merchant incurs additional costs during the state of emergency, prices may not exceed 10 percent above the normal markup from cost.
Investigators Michael Bruch, Patrick Mullan, and Jared O’Cone of the Division of Consumer Affairs’ Office of Consumer Protection, conducted these investigations. Deputy Attorneys General Jeffrey Koziar, Natalie A. Serock, and Alina Wells, of the Consumer Fraud Section within the Division of Law, represented the State in these actions.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.
The Sun is awaiting a call back from hotel representatives, who were not immediately available for comment Tuesday morning.
————————————————————
Follow the Asbury Park Sun on Facebook and Twitter.
