Florida Limits Hurricane Price Gouging

THE first week after Hurricane Andrew, South Florida was the scene of price gouging: ice at $8 a bag, overpriced gasoline, batteries, generators, and chain saws.

As the immediate crisis subsides and relief flows in, profiteers will look for longer-term opportunities. Building materials and contract labor are prime targets. They will be in short supply as residents rebuild.

At some stores here, a sheet of plywood sold for $30 - more than twice the pre-hurricane price. The Florida attorney general's office investigated the retailers, who blamed the wholesalers. On Aug. 27, it issued seven subpoenas to wholesalers.

"We've hit pretty hard and pretty early to send a message out there," says Joe Bizzaro, public information director for the attorney general.

The response has helped, apparently, since consumer complaints have diminished. Still, residents in neighborhoods hit hard by Hurricane Andrew say they've been approached by unscrupulous contractors. One Miami resident said a contractor offered to temporarily repair his roof for $1,500 - an operation that should cost no more than a few hundred dollars. The attorney general has issued subpoenas to at least two roofing contractors who were charging up to $100 for estimates that are normally free.

Florida's moves are new. Traditionally, US courts have not prosecuted gougers (with a few exceptions, such as in wartime and in the case of lending). But right after Hurricane Andrew hit South Florida, Gov. Lawton Chiles issued an executive order declaring price gouging illegal under the state's Unfair and Deceptive Trade Practices Act. The act is broad enough that even without the governor's order a legal case could be made against gougers, argues Winton Williams, professor of law at the University of F lorida. The executive order bolsters the case, he adds.

"People are going to be confronted by contractors and have no idea whether they're legitimate or not," says John Rashford, a University of Charleston professor whose own house was damaged by Hurricane Hugo in 1989.

The National Association of Home Builders is working to set up a referral service to screen out-of-state contractors and issue temporary licenses.