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Tropical Storm Florence is flooding North Carolina with more than just water. State officials have begun investigating more than 600 reports of price gouging in the wake of the storm, which hit the coast as a Category 1 hurricane early Friday morning.
Price gouging is illegal during disasters and disaster recovery. Its definition under North Carolina law is somewhat ambiguous — there are plenty of economic factors that inspectors must consider, both pro and con, to make their case — but in general it’s when businesses charge prices for their goods or services that are “unreasonably excessive under the circumstances.”
People typically think of consumers as being the only victims of price gouging, but it’s not just retail or services businesses that can be accused. The law applies to all the middlemen in the supply chain, too, to help protect local businesses as well as consumers.
If you suspect price gouging in North Carolina, you can report it by calling 1-877-5-NO-SCAM or by filing a complaint online with the attorney general’s office at www.ncdoj.gov/disasters.aspx. That link also has information for anyone who wants to report charity scams, insurance scams or other cons surrounding Hurricane Florence.
As of Tuesday, N.C. Attorney General Josh Stein’s office was looking into around 650 price gouging complaints, spokeswoman Laura Brewer said.
The complaints have been for “mostly gas and water,” Brewer said. And so far the amount of price gouging is only about half of what the state investigated over the past two years, after Hurricane Matthew in 2016 led to 1,500 complaints of price gouging.
But the state is still in an official state of emergency because of Florence, since flooding continues to threaten many Eastern North Carolina communities. And until the official disaster announcement is lifted, people can continue reporting suspected price gouging.
Anyone who evacuated from the storm to a surrounding state and experienced price gouging there should contact that state’s attorney general, instead of Stein’s office. Not all states have laws against price gouging, but South Carolina, Georgia, Tennessee and Virginia all do.
Some politicians and economists oppose laws against price gouging because they say the laws violate the principles of free-market capitalism. Others say that allowing businesses to engage in price-gouging would help prevent shortages of supplies before, during and after a disaster.
As The News & Observer previously reported, senior economist Roy Cordato of the conservative John Locke Foundation think tank in Raleigh is among those who opposes North Carolina’s ban on price gouging.
He wrote an essay that outlined a number of reasons why price gouging should be allowed, including that it could dissuade people from hoarding an unnecessary amount of supplies, and therefore denying others access to those same supplies.
“If prices are allowed to rise as the demand increases, this ‘hoarding’ behavior will become increasingly more expensive and therefore discouraged,” he wrote. “In other words, the higher price encourages conservation right at the time when it is most needed. This will leave more gasoline in the tanks at the gas stations where it is available for those who really need it both before the hurricane and during its immediate aftermath, instead of in the tanks of cars that are sitting in people’s garages or driveways.”
However, such opinions have yet to gain broad political support in the North Carolina General Assembly.
Lawmakers here first made price gouging illegal in 2003 and further strengthened the ban in 2006, both times with near-unanimous bipartisan support. The bills were initially passed under Democratic control of the legislature and have remained in place under seven years of Republican control.
Doran: 919-836-2858; Twitter: @will_doran