AG warns against fraud, price gouging

Montgomery - In the wake of dozens of tornadoes that wreaked havoc throughout Alabama yesterday, Attorney General Luther Strange pledged that his office will be vigilant in protecting our citizens from those who might exploit this tragedy for illegal profit.

He also warned against looting, and pledged that the Attorney General's Office will work with local law enforcement to make sure that anyone caught looting is prosecuted to the fullest extent of the law.

With a State of Emergency officially declared for every county of Alabama, the state's price gouging law now is in effect throughout the state.  The Attorney General also reminds citizens to be careful of potential home repair fraud.

The National Weather Service reported 66 tornadoes struck in Alabama yesterday and the Alabama Emergency Management Agency reported 162 dead as of late this morning.

"This is a disaster of epic and heartbreaking scope for all people throughout Alabama," said Attorney General Strange.  "We are saddened by the tremendous loss of life and devastation that is being borne by our citizens.  It is unbelievable that anyone would take advantage of their fellow citizens' suffering, yet we must be wary of those who see this as an opportunity for gain even at the cost of harming our people who are in severe distress.  Let there be no doubt that such acts are not only despicable, but they also are serious crimes that the Attorney General's Office will thoroughly investigate and aggressively prosecute.  I urge our citizens to be cautious of those who would prey upon them through crimes such as price gouging and home repair fraud; I warn the criminals that if they do so, they will be punished sternly."

Alabama's price gouging law comes into effect when the Governor has declared a State of Emergency and prohibits "unconscionable pricing" of items for sale or rent.

Although what constitutes an unconscionable price is not specifically set forth in state law, a price that is 25 percent or more above the average price charged in the same area within the last 30 days--unless the increase can be attributed to a reasonable cost-- is a prima facie case of unconscionable pricing.

The penalty is a fine of up to $1,000 per violation, and those determined to have willfully and continuously violated this law may be prohibited from doing business in Alabama.

As Alabamians begin to rebuild, home repair fraud becomes a real, persistent, and serious problem in Alabama. A first offense of home repair fraud is a class A misdemeanor, punishable by up to one year imprisonment and fines of up to $6,000 for each count. Subsequent offenses are a class C felony, punishable by one to 10 years imprisonment and fines of up to $15,000 for each count.

Attorney General Strange cautions consumers to be wary and to take the following precautions when hiring someone to make repairs:

  • Find out as much as you can about the workers, especially if they make unsolicited contact with you or have come from out-of-town after a natural disaster.
  • Ask for proof that they are bonded or insured.
  • Ask if they are licensed.  Regulations vary, but plumbers and electricians must be tested to be licensed by the state.  Contractors may be required to have local licenses if they do major work, but those who do small odd jobs may not have to be licensed.   You may check with the Alabama Home Builders Licensure Board to see if a contractor is licensed by calling 1-800-304-0853.
  • Ask if this particular job requires a permit.  Most construction and home repairs of major significance require a permit from the county or city.  Do not let them talk you into applying for the permit in your name.  If they do not want to be known to local officials, they may be hiding a bad reputation.
  • Get a written estimate detailing the work to be done and setting a completion date.
  •  Ask for references.  Get names and addresses, and consider checking examples of work they have done.
  • Do not pay too much up-front.  You should pay only a minimal amount, perhaps as much as one-fourth, to indicate good faith and ability to pay.   If they tell you more money is needed in advance, be wary.  They should be able to pay for supplies or have credit to make necessary purchases until you compensate them afterward.
  • Make sure you can contact them.  Be wary if they can only give you a pager number, a cell phone number, or a post office box address.  Businesses with established addresses may be safer.

Attorney General Strange urges consumers and officials to report any problems of alleged fraud or illegal price gouging to his Office of Consumer Protection by calling toll-free 1-800-392-5658, by writing to 501 Washington Avenue, Montgomery, Alabama, 36130, or though the Attorney General's main web page at

Information from press release.