Motels Settle Accusations of Price Gouging During Hurricane

price gouging hurricane dollyFive motels accused of jacking up the price of rooms as people sought refuge as Hurricane Dolly was bearing down agreed to settle charges they gouged consumers during a disaster.

Five South Texas motel operators have signed settlement agreements on price-gouging charges, Texas Attorney General Greg Abbott said in a statement. They are: Motel 6 in Harlingen; Best Western Las Palmas Inn; Comfort Inn in Edinburg; Comfort Inn in Pharr; and Country Hearth Inn & Suites in Pharr and McAllen.

They admitted no wrongdoing, but agreed to not charge consumers exorbitant prices. Under the settlement, the motel operators agreed to pay civil penalties to the state and change their business practices during a declared disaster.They're prohibited from charging or accepting excessive or exorbitant fees for rooms during a disaster, a price in excess of 10% of the average rate. They must also post the daily room rate in each room and maintain a registration system that includes guests' names, contact information, length of stay and rates charged per day. In addition, Motel 6 in Harlingen and Best Western Las Palmas Inn are prohibited from collecting hotel occupancy taxes from evacuees who are fleeing a disaster when the governor waives such taxes.

Chris Franz, attorney for Comfort Inn in Edinburg, Comfort Inn in Pharr, and Country Hearth Inn & Suites in Pharr and McAllen, told Consumer Ally that his clients deny all liability and the allegations made by the state of Texas. And Franz added:

But taking into account the vast resources the state of Texas and its attorney general have at their disposal in pursuing these cases, it was in the best economic interest of my small business clients to settle this case rather than incur the very expensive attorney fees and expert costs necessary to obtain vindication.

Fela B. Olivarez, attorney for Best Western Las Palmas Inn, also told Consumer Ally the state's allegations were unfair and that her client settled the charges due to concerns about the expense of fighting them.

The attorney for Motel 6 in Harlingen couldn't be reached for comment.

Under Texas law, when the governor declares a disaster, businesses are prohibited from raising prices to profit from the disaster. The attorney general is charged with enforcing the law. Under the Texas Deceptive Trade Practices Act, companies can't sell or lease fuel, food, lodging, medicine or other necessities for excessive or exorbitant prices.

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