N.Y. AG Orders Stations to Stop 'Deceptive' Pricing

Retailers prominently displayed one price but charged more at pump, Schneiderman alleges

Published in CSP Daily News

WATERTOWN, N.Y. -- New York state attorney general Eric T. Schneiderman said late last week that his office has issued cease and desist letters warning several Watertown gas station locations that they will face possible court action if they do not stop "falsely" advertising one price, and then charging customers more at the pump.

The AG's Watertown Regional Office sent letters to the owners of Valentine Stores Inc., Rajit Inc. and General Store Inc. stating they needed to discontinue the deceptive roadside marketing and get into compliance.

At least four of the [image-nocss] Nice N Easy gas stations, owned by Valentine Stores, with locations throughout Watertown, a Valero station and the General Store engaged in false advertising by listing the lower prices on their large street-view signage in order to lure patrons to the pump. The lower price was for "cash-only" transactions. The only text displayed to passing motorists indicating that this was the "cash" price was small and not easily visible.

"What these gas stations did is a classic example of bait and switch. Consumers were lured in by the lower price but when they went to fill up their tanks, they were hit with a higher price if they didn't pay with cash," said Schneiderman. "At a time when gas prices are high enough already, my office will work to make sure consumers are not tricked into paying a penny more by such deceptive practices."

Schneiderman is continuing to monitor gasoline prices throughout the state on all levels, he said, from the fuel retailer, distributor and manufacturer. Prices at the pump have led to an increase in consumer complaints to the AG's office, and Schneiderman has directed his staff to compile data on the prices charged by gasoline retailers, as well as information on the chain of distribution, to determine the cause behind the continued increases.

Schneiderman has also been appointed to a national Oil & Gas Price Fraud Working Group instituted by U.S. Attorney General Eric Holder, joining a team to investigate any abuse of consumers in the pricing of oil and gasoline.

The roadside listing of a price without equally prominent disclosure of the higher standard price for credit purchases violates the New York Executive Law 63 (12) prohibition against deceptive acts and practices, as well as the General Business Law.

Keywords: 
fuel prices