Hardware stores hiked prices

The Attorney General’s Office discovered that certain businesses on Saipan increased the prices of their commodities soon after the onslaught of Supertyphoon Chaba last week.

CNMI consumer counsel Brian Caldwell said at least two hardware stores on the island improperly hiked their prices of construction supplies after the supertyphoon damaged hundreds of houses on the island.

These are besides the Tinian hardware store earlier reported to have also engaged in price gouging, Caldwell said.

Acting on consumers’ complaints, the Attorney General’s Investigative Unit dispatched personnel to verify the cases of price gouging. The AGO directed investigators to serve cease and desist notices to the companies for them to roll back prices of construction supplies.

The hardware stores on Saipan were found to have increased the prices of tin—which is used as roofing material—as well as roofing nails and wood. One of the companies hiked the price of its 512-square-foot tin from $23 to $25.99—an increase of almost $3 or some 13 percent from the pre-typhoon price.

Consumers reported these incidents on Saipan Friday, right after the AGO publicly warned retailers of possible legal action if they hiked their commodities’ prices during a disaster to take advantage of the increased demand.

Caldwell refused to reveal the names of the companies as of press time, pending their possible compliance with the cease and desist orders.

“If they don’t comply, they could be sanctioned with penalties under the Consumer [Protection] Act,” Caldwell said.

If this happens, the consumer counsel said the AGO would secure a court order to compel these companies to roll back hiked prices. The AGO could also seek a court order that would impose monetary penalties on the companies.

A more severe sanction is permanent closure of the businesses, besides possible criminal prosecution.

Last Thursday, the AGO publicly warned retailers involved in price gouging, saying that the CNMI’s Consumer Protection Act provides serious penalties that include permanent prohibition to engage in trade and commerce.

Citing local statute, the AGO explained that price gouging occurs when a business increases the price of goods “solely on the basis of a shortage of supply caused by natural disaster or any other emergency situation.”

The supertyphoon destroyed or damaged at least 2,150 houses on Saipan, Tinian, and Rota, based on a preliminary report by the American Red Cross. Some 323 houses got totally destroyed, 883 sustained major damage, while 944 had minor damage.

Saipan had the most number of wrecked houses, with 222 totally destroyed, 583 sustaining major damage, and 367 left with minor damage. Tinian had 28, 122, and 54, respectively; while Rota had 73, 178, and 523.

Caldwell said no case of price gouging on Rota has been reported to his office yet. He said there has been no report yet of price gouging for basic commodities such as water, rice, and chicken.

The AGO had also directed its investigators to conduct inspections of these items and other commodities such as batteries, flashlight, candles, and film.

The AGO strongly encouraged consumers to report suspected cases of price gouging at 664-2341, fax no. 664-2349, or email attorneygeneral@saipan.com. Complaints may also be brought personally before the AGO on Capitol Hill.