Findings and goals

(a)

Findings

Congress finds that— (1)the United States experiences tremendous generosity and goodwill in the wake of natural disasters; (2)unfortunately, some unscrupulous individuals take advantage of those disasters in an attempt to gain financially; (3)the Federal Trade Commission is charged with preventing unfair methods of competition and unfair and deceptive acts or practices under section 5 of the Federal Trade Commission Act (15 U.S.C. 45); (4)the Federal Trade Commission has extensive experience analyzing markets and competitive issues in order to determine whether market participants are engaging in actions that may have anticompetitive effects; and (5)the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Energy and Commerce of the House of Representatives are charged by their respective Houses with consumer protection. (b)

Goals

The goals of this Act are— (1)to decrease the occurrence of persons charging unconscionably excessive prices for consumer goods and services following natural disasters; (2)to require the Federal Trade Commission to conduct ongoing investigations of actions intended to disadvantage consumers following natural disasters; and (3)to ensure that sufficient enforcement authority is available to the Commission to carry out the responsibilities of the Commission under this Act and the amendments made by this Act.

Price gouging prohibition following major disasters

The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is amended— (1)by redesignating sections 25 and 26 as sections 26 and 27, respectively; and (2)by inserting after section 24 the following:

25.

Protection from price gouging following major disasters

(a)

Definitions

In this section: (1)

Affected area

The term affected area means an area affected by a major disaster declared by the President under Federal law in existence on the date of enactment of the Protection From Price Gouging Against Disaster Victims Act of 2005. (2)

Consumer good or service

(A)

In general

The term consumer good or service means a good, piece of equipment, or service provided primarily for personal, family, or household purposes, including food, water, ice, a chemical, a building supply, a tool, a petroleum product, a residential construction, reconstruction, or repair service, or a service for the removal of debris (including a damaged tree) or garbage. (B)

Inclusion

The term consumer good or service includes a property or a facility rented to a consumer for use as a residence or storage facility. (3)

Price gouging

The term price gouging means the charging of an unconscionably excessive price by a supplier in an affected area. (4)

Supplier

The term supplier includes a seller, reseller, wholesaler, distributor, retailer, lessor, provider, or licensed or unlicensed contractor, subcontractor, or laborer engaged in the provision or distribution of a consumer good or service. (5)

Unconscionably excessive price

The term unconscionably excessive price means a price charged in an affected area for a consumer good or service that— (A)represents a gross disparity, as determined by the Commission in accordance with subsection (e), between the price charged for the good or service and the average price of the good or service charged by suppliers in the affected area during the 30-day period immediately before the President declares the existence of a major disaster; and (B)is not attributable to increased wholesale or operational costs incurred by the supplier in connection with the provision of the consumer good or service. (b)

Determination of the Commission

Following the declaration of a major disaster by the President, the Commission shall— (1)consult with the Attorney General of the United States, the United States Attorney for the district in which the disaster occurred, and State and local law enforcement officials to determine whether any supplier in the affected area is charging or has charged an unconscionably excessive price for any consumer good or service provided in the affected area; and (2)establish within the Commission— (A)a toll-free hotline that a consumer may call to report an incidence of price gouging in the affected area; and (B)a program to develop and distribute to the public informational materials in English and Spanish to assist residents of the affected area in detecting and avoiding price gouging. (c)

Price gouging involving disaster victims

(1)

Offense

During the 180-day period after the date on which a major disaster is declared by the President, no supplier shall provide, or offer to provide, any consumer good or service in an affected area at an unconscionably excessive price. (2)

Action by Commission

(A)

In general

During the period described in paragraph (1), the Commission shall conduct investigations to determine whether any supplier in an affected area is in violation of paragraph (1). (B)

Positive determination

If the Commission determines under subparagraph (A) that a supplier is in violation of paragraph (1), the Commission shall take any action the Commission determines to be appropriate to remedy the violation. (3)

Civil penalties

A supplier that commits an offense described in paragraph (1) may, in a civil action brought in a court of competent jurisdiction, be subject to— (A)a civil penalty not more than $500,000; (B)an order to pay special and punitive damages; (C)an order to pay reasonable attorney's fees; (D)an order to pay costs of litigation relating to the offense; (E)an order for disgorgement of profits earned as a result of a violation of paragraph (1); and (F)any other relief determined by the court to be appropriate. (4)

Criminal penalty

A supplier that knowingly commits an offense described in paragraph (1) shall be imprisoned not more than 1 year. (5)

Action by victims

A person, Federal agency, State, or local government that suffers loss or damage as a result of a violation of paragraph (1) may bring a civil action against a supplier in any court of competent jurisdiction for disgorgement, special or punitive damages, injunctive relief, reasonable attorney's fees, costs of the litigation, and any other appropriate legal or equitable relief. (6)

Action by State attorneys general

An attorney general of a State, or other authorized State official, may bring a civil action in the name of the State, on behalf of persons residing in the State, in any court of competent jurisdiction for disgorgement, special or punitive damages, reasonable attorney's fees, costs of litigation, and any other appropriate legal or equitable relief. (7)

No preemption

Nothing in this section preempts any State law. (d)

Report

Not later than 1 year after the date of enactment of the Protection From Price Gouging Against Disaster Victims Act of 2005, and annually thereafter, the Commission shall submit to the Committee on Commerce, Science, and Transportation of the Senate and the Committee on Energy and Commerce of the House of Representatives a report describing— (1)the number of price gouging complaints received by the Commission for each major disaster declared by the President during the preceding year; (2)the number of price gouging investigations of the Commission initiated, in progress, and completed as of the date on which the report is prepared; (3)the number of enforcement actions of the Commission initiated, in progress, and completed as of the date on which the report is prepared; (4)an evaluation of the effectiveness of the toll-free hotline and program established under subsection (b)(2); and (5)recommendations for any additional action with respect to the implementation or effectiveness of this section. (e)

Definition of gross disparity

Not later than 180 days after the date of enactment of the Protection From Price Gouging Against Disaster Victims Act of 2005, the Commission shall promulgate regulations to define the term gross disparity for purposes of this section.