Anti-Price Gouging Law

SACRAMENTO – California Attorney General Xavier Becerra issued a consumer alert following the Governor’s declaration of a state of emergency in effect statewide due to wildfires blazing through the North Bay. Charging more than 10% more than an item was previously sold for is known as price gouging, and during a state of emergency is illegal under Penal Code Section 396.

“Families in California are in the midst of dealing with devastating wildfires. They shouldn’t have to worry about whether they’re being illegally cheated out of fair prices,” said Attorney General Becerra. “I encourage anyone who has been the victim of price gouging, or who has information regarding potential price gouging, to immediately file a complaint through my Office’s website or call (800) 952-5225, or to contact their local police department or sheriff’s office.” 

This announcement comes as consumers are posting screenshots of third party hotel sites charging over $1,000 per night for hotel rooms in the areas surrounding the fires. It is unclear if this was a glitch or intentional, but it is clear that charging that much during an emergency violates the law. This law applies to those who sell food, emergency supplies, medical supplies, building materials, and gasoline, as well as to repair or reconstruction services, emergency cleanup services, transportation, freight and storage services, hotel accommodations and rental housing. Exceptions to this prohibition exist if, for example, the price of labor, goods, or materials has increased for the business.

Violators of the price gouging statute are subject to criminal prosecution that can result in a one-year imprisonment in county jail and/or a fine of up to $10,000. Violators are also subject to civil enforcement actions including civil penalties of up to $5,000 per violation, injunctive relief, and mandatory restitution. The Attorney General and local district attorneys can enforce the statute.