Senate Democrats Unveil Plans To Protect Consumers From Price Gouging

Banning tracking devices, guarding Social Security numbers, subscription renewal protection part of Senate Democrats’ ‘consumer protection agenda’

EAST HAVEN—Standing inside Goody’s Hardware & Paint, a fourth generation family owned and operated business, Senate Democratic leaders unveiled their plans to fight price gouging after severe storms and protect consumers’ privacy.

Extreme weather last winter created a great need for various weather related services. When the snows melted, flooding across Connecticut required pumping of waterlogged basements. Last year’s record-breaking snows caused several buildings to collapse, and required snow removal from residential and commercial roofs. The power outages that resulted from the October snowstorm greatly increased demand for lodging.

“Connecticut residents shouldn’t be taken advantage of by greedy contractors or unscrupulous businesses in the face of extreme weather,” said Senate President Donald E. Williams, Jr. “This past year, Connecticut residents endured a record-breaking winter, spring flooding, a destructive tropical storm and a fall snowstorm that knocked out power for days on end. All of these events generated a need for emergency-related services and products, and unfortunately some people tried to exploit that need for their own exorbitant profit.”

Democratic leaders are proposing that during a severe weather event, no person in the chain of distributing consumer goods or services can sell or offer to sell any goods or services for an unconscionably excessive price. Such goods and services would include those that are vital and necessary for health, safety or welfare of consumers and are used, bought, or rendered primarily for personal, family or household purposes, including, but not limited to, snow removal and flood abatement services and lodging would be covered under the proposal.

“Last year’s severe weather demonstrated that Connecticut consumers are vulnerable to price gouging for services and lodging,” said Senate Majority Leader Martin M. Looney. “We intend to extend the state’s price-gouging ban, originally adopted following Hurricane Gloria in 1986, beyond the goods it covers now, and ensure consumers are well protected when it comes to services and lodging.”

Under current law, section 42-230 of the Connecticut General Statutes prohibits an increase in the price of any good sold in an area under a formal disaster emergency declaration by the governor or president of the United States. The proposed bill would extend the ban on price gouging to cover services and lodging as well as goods. The ban would apply during, and potentially in the aftermath of, a weather emergency which results in a formal severe weather event declaration by the governor.

“A ban on price gouging is about basic fairness. When your home is damaged and the power is out after a big storm, you already have several problems on your hands. The last thing you need after an emergency, particularly as a senior citizen, is an exploitative contractor trying to charge you double what your home repairs actually cost,” said Senator Paul Doyle (D-Wethersfield).

Whether a price is “unconscionably excessive” would be determined by the commissioner of Consumer Protection or in court, taking into account the common price of the relevant goods and services prior to the emergency and the amount charged by other providers to consumers in the same area during that emergency.

Banning Personal Tracking Devices

Also on the Senate leadership’s consumer protection agenda is a proposal banning the use of personal tracking Global Positioning System (GPS) devices. Unlike the devices used by motorists, these small devices can be secretly attached by an individual to another person’s car without the driver’s knowledge or consent allowing that vehicle’s movements to be tracked by the perpetrator on their computer.

“Connecticut residents should be able to go about their daily lives without the fear that their movements are being monitored by abusive spouses or strangers,” said Senator Williams. “The Supreme Court recently ruled that the placement of a GPS device on an individual’s car by law enforcement, without a warrant, is in violation of the 4th Amendment. While this ruling does not speak to the issue of electronic monitoring by individuals, we should not delay banning use of this dangerous and scary practice.”

Stopping the Unnecessary Collection of Social Security Numbers

Senate leadership is also proposing a law that will stop the collection of Social Security numbers by private businesses for purposes beyond credit, taxes, employment, investment, new bank accounts, child support and criminal record checks, unless a social Security Number is required by law.

“Connecticut currently prohibits public disclosure of Social Security numbers by individuals and businesses,” said Senator Looney. “However, many businesses that do not need the Social Security number to conduct their business with the consumer still include a dedicated space on forms for the number. The collection of these numbers is unnecessary and, as we have seen time and again, a recipe for disaster.”

Requiring Explicit Notification of the Expiration of Introductory Rates and Automatic Subscription Renewals

Senate leaders will also raise a bill that requires businesses to provide notifications of the upcoming expiration for introductory rates or trial periods.

Current state statutes generally require that anyone who sells or offers to sell consumer goods or services at an introductory rate that will change at the end of the introductory period to provide a clear and conspicuous written notice informing the purchaser that he can cancel at the end of the introductory period. The notice must include the cancellation procedure. The law requires a seller to give the notice to the purchaser with (1) any written promotional material provided before the start of the introductory period or (2) the initial delivery. The law states that goods or services provided after the introductory period ends and after the contract has been cancelled or not renewed are deemed an unconditional gift. These provisions already apply to trial offers.

The new bill will also require businesses to provide notifications of automatic renewal to consumers if the contract is greater than 31 days and eliminate the exemption for automatic renewal periods of less than 31 days—any period of automatic renewal following the original contract requires notification. After the first automatic renewal period notification, the consumer should be notified again in six-month periods.

For example, if the service has a 3-month introductory rate, consumers should be given written notice 30 days before the introductory rate will expire.