Texas AG files first 3 price gouging lawsuits

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Texas Attorney General Ken Paxton has filed several lawsuits against Texas businesses that allegedly gouged consumers who needed food, shelter, fuel and other essentials during Hurricane Harvey.

One of the businesses based in North Texas was caught allegedly charging drivers $6.99 for a gallon of regular unleaded gas on Aug. 31, the day many drivers reported shortages at the pumps.

According to a release from attorney general’s office, state law prohibits businesses from charging exorbitant amounts during a declared disaster.

The Bains Brothers, who own Texaco-branded gas station in Arlington, Carrollton and Richardson, are accused of charging the higher price even while displaying signs with prices in the $3-$4 range.

The lawsuit alleges the Bains Brothers stations “engaged in unlawful price gouging by demanding and charging an excessive price for fuel. Prices went up 40 cents per gallon while customers were filling up. And in some cases, prices changed so rapidly numbers were removed from one side of the sign.”

Among those who filed a complaint with the attorney general was Susan Thach, who pulled into the Texaco station in Carrollton and found a sign that said gas was $3.29 a gallon for regular. But when she began to pump the gas, she realized it was really $6.99 a gallon.

"Why they charge too much? They charge too much. They don't  put the price," she said. "Then I came back to take a picture. Then I call for my daughter."

After sending the picture of her receipt to her daughter, Duyen Lam did the rest on social media.

"I told my mom to send me the pictures," Lam said. "And I posted it on Facebook, and then everybody just shared."

A man inside one of the Texaco gas stations, who identified himself to me as one of the Bains brothers, first agreed to an interview with FOX 4. But after making a phone call, he changed his mind and blamed the problem on Aug. 31 on a mechanism in the pumps and software at all of the stations listed in the lawsuit. On the same day, he referred FOX 4 to a vendor who services the pumps. We called several times with no success.

Additional lawsuits were filed against Encinal Fuel Stop, a Chevron-branded gas station just outside Laredo. It allegedly charged customers $8.99 and $9.99 a gallon for regular unleaded gas on the same day.

In Robstown near Corpus Christi, the Best Western Plus Tropic Inn allegedly charged three times its normal room rate the weekend Hurricane Harvey hit. Best Western has since ended its relationship with the hotel’s owner, Robstown Enterprises.

"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. "Texas has tough price gouging laws, and my office will continue to aggressively investigate and prosecute cases arising from Hurricane Harvey."

The three lawsuits are likely just the first of many as the attorney general’s office sorts through more than 3,000 consumer complaints related to Hurricane Harvey.

Dallas attorney Sid Scheinberg is not involved in the case. He says if gas stations price gouged, the penalties will be painful.

“It’s $20,000 for an ordinary person. $250,000 per occurrence if the person they ripped off is over 65,” the attorney explained. “That’s gonna put the average mom-and-pop gas station out of business.”

The attorney general wants restitution for all those who filed a complaint. Texans who believe they’ve been scammed or price gouged are encouraged to call the AG’s Consumer Protection Hotline at 1-800-621-0508, email consumeremergency@oag.texas.gov, or file a complaint online at www.texasattorneygeneral.gov/cpd/file-a-consumer-complaint.

Price gouging carries civil penalties of up to $20,000 for each violation. The penalties are even higher if the victims are senior citizens.

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