Texas reaches settlements with accused Harvey price gougers

FILE - Gas station pump nozzle

AUSTIN (KXAN) — The Texas Attorney General’s Office has filed four separate settlement agreements with gas stations owners accused of price gouging as Hurricane Harvey devastated the Texas coast last August. The filings started last week in Austin. 

The filings are known as “Assurance of Voluntary Compliance” and are agreements in lieu of litigation between the Attorney General’s Office and the accused.

The agreements are not an admission of guilt. Instead, the “assurance is being entered into by the parties for the sole purpose of compromising disputed claims without the necessity for protracted and expensive litigation,” according to the filings. 

The four gas stations the Attorney General’s Office reached settlements with are in the Dallas-Fort Worth area: 

Khalid I. Abdulhaq/Meadowbrook Texaco
6601 Meadowbrook Drive
Fort Worth, TX
Price per gallon: $3.99

BMN Corporation/Bob’s Exxon
2170 W. Northwest Highway 
Dallas, TX
Price per gallon: $4.49

PalTex Group, Inc./Shell on the Go
7101 Lake June Road
Dallas, TX
Price per gallon: $3.99

Thaman Enterprise, LLC/Caddo Stop
1001 South Caddo Street
Cleburne, TX
Price per gallon: $3.99

State investigators targeted the stores in the aftermath of Harvey’s landfall as complaints from people who purchased fuel and from people who saw the advertised prices were reported to the Attorney General’s Office’s consumer complaint line. 

Texas Gov. Greg Abbott issued a State of Disaster declaration on Aug. 23, 2017.

That declaration activated the state’s price gouging law, meaning anyone found to have charged an “exorbitant or excessive” price for fuel, hotel rooms, and food could be prosecuted and fined tens of thousands of dollars for price gouging.

The state’s standard for fuel price gouging is met when a gas station hikes prices during a state of disaster that are higher than 125 percent of the average price per gallon for the previous 30 days, according to the Attorney General’s Office.

State prosecutors don’t consider price gouging when a business can prove a price adjustment was “attributable to additional fuel supply costs,” the court filing states. 

The settlement also requires each gas station to give state prosecutors the names of every person who bought fuel with a debit/credit card and the dollar amount the station returned to the bank accounts connected to the credit/debit card.

Gas stations will only be required to refund the difference paid per gallon between the 30-day average and the inflated cost. The gas station is also required to pay the state $300 for customers who paid cash for fuel purchased under the inflated price. 

The $300 will be split among any of the cash customers who file a claim with the Attorney General’s Office seeking reimbursement. The state will begin accepting claims on June 11, 2018 and the claim period will end Sept. 10, 2018. Refunds will begin to be issued after the claim deadline ends. 

Texas law allows the attorney general to seek civil fines against people guilty of price gouging during a disaster declaration.

State prosecutors could have sought fines of up to $20,000 for every time a business price gouged someone and fines of $250,000 for each price gouging incident involving someone age 65 and older. 

The state, by electing not to take these four gas station owners through the court process, did not seek those penalties in these four cases.

If these businesses do not follow through with the Assurance of Voluntary Compliance, the state would consider the settlement agreement “prima facie” evidence of a violation of the Deceptive Trade Practices – Consumer Protection Act, the filing states. 

KXAN Investigation leads to 40 hotel refunds

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