Price gouging alleged in ‘troubling reports’ to FTC

As Hurricane Milton approached landfall in western Florida on Wednesday, the Biden administration warned consumers and businesses of the heightened risk of potential fraud, price gouging and collusion that accompanies major natural disasters.

“We’re hearing troubling reports of price gouging for essentials that are necessary for people to get out of harm’s way — from hotels to groceries to gas,” Federal Trade Commission Chair Lina Khan said in a statement Wednesday.

By noon ET on Wednesday, nearly a quarter of gas stations in Florida were out of gas, according to Patrick De Haan, an oil and gas analyst who tracks pump supply.

“Companies are on notice: do not use the hurricane as an excuse to exploit people through illegal behavior,” said Manish Kumar, a deputy assistant attorney general in the Justice Department’s Antitrust Division.

Most states have laws intended to curb price gouging, with many of these restrictions tied to declared states of emergency.

“Wrongdoers are looking to exploit opportunities and victims of natural disasters for their own personal gain,” Ronald C. Gathe Jr., U.S. Attorney for the Middle District of Louisiana, said in a statement.

Several major airlines and retailers have told CNBC in recent days that they froze prices in advance of the storm.

“Once we have any emergency situation, all of our prices are freeze,” Kelly Mayhall, president of Home Depot’s Southern division, told CNBC on Wednesday.

Amid a historic hurricane season, the Biden administration cited a number of issues for consumers to be on the lookout for, including fraudulent charities that claim to be soliciting donations for disaster victims, scammers trying to get personal information or money, and exorbitant pricing for necessities.

“Any company or individual that tries to exploit Americans in an emergency should know that the Administration is monitoring for allegations of fraud and price gouging and will hold those taking advantage of the situation accountable,” Vice President Kamala Harris said in a statement on Wednesday.

Hurricane Milton was moving through the Gulf of Mexico as a Category 4 storm early Wednesday afternoon, and was expected to hit the western Florida Gulf Coast sometime between 10 p.m. and 2 a.m. ET, according to NBC News meteorologists.

The National Hurricane Center warned that evacuations and other precautions should have been completed by early Wednesday.

In September, Hurricane Helene caused widespread devastation across the South, killing more than 230 people. North Carolina Attorney General Josh Stein has also warned of price gouging in his state.