Price gouging is the practice of raising prices sharply in anticipation of or during a civil emergency. The term is distinguished from profiteering by being short-term and localized, and by a restriction to essentials such as food, clothing, shelter, medicine, and equipment needed to preserve life, limb, and property. In many jurisdictions, price gouging is a felony.
The Federal Trade Commission (FTC) is responsible for recognizing a pattern of consumer violations requiring law enforcement action. The FTC monitors gas prices across the country based on a formula that analyzes the prices that consumers pay for gasoline at their local gas station. Before Katrina, the FTC received many telephone calls from consumers about rapidly increasing gas prices, as did many members of Congress. There are no federal statutes for prosecuting gas price gouging; however, about half the states have statutes.
In July 2005, the FTC released a report titled “Gasoline Price Changes: the Dynamic of Supply, Demand, and Competition.” Visit http://www.ftc.gov/opa/2005/07/gaspricefactor.htm for a summary. The 166-page report can be found at http://www.ftc.gov/reports/gasprices05/050705gaspricesrpt.pdf.
The FTC also provides information to educate Americans as consumers. Visit http://www.ftc.gov/bcp/conline/pubs/alerts/fuelalrt.pdf for tips on getting good mileage.
Definition of price gouging from http://en.wikipedia.org/wiki/Wikipedia.
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