Attorney General, local DAs warn against price gouging during wildfires

SAN FRANCISCO (KGO) -- When items are in short supply, prices go up. However during an emergency, like our wildfires, the law of supply and demand is suspended.

The California Attorney General's office has issued a consumer alert reminding businesses that when the governor declares a state of emergency, price gouging rules kick in, limiting most price increases to no more than 10 percent above what was being charged before the declaration.

Get the latest updates and videos on wildfires burning across the Bay Area here.

So food, bottled water and ice prices must remain constant, same with gasoline and medical and emergency supplies.

Over the years I have seen few problems with those items, however I have heard of issues with hotels multiple times. At a news conference yesterday, Santa Cruz County District Attorney Jeff Rosell said he is getting reports about hotels, too.

He said, "I've heard of hotels... that are trying to take advantage of people. Who during this time of crisis, want to jack up the rates for various things, and I promise you, if we find out that, we're coming after you, too."

RELATED: How to report price gouging during California wildfires

The dynamic pricing model of hotels -- where prices go up when demand goes up -- is built into most room reservation systems.

So when the Super Bowl was held here, hotel prices spiked -- but that does not make the practice legal during an emergency.

During the 2015 Valley Fire, I received reports of hotel price gouging and spoke with California Board of Equalization investigators about what was found.

Investigator Joey Luiz told me, "I went to the guests before going to the front desk and asked what they paid. A lot of the time it was twice what the usual rate should be. Mistake or not, it is against the law to do that."

All of the overcharged guests received refunds after my reporting.

Emergency repairs and home building are also protected, but it can be a hard case to make. So hang on to all of your receipts, they could be needed later.

Take a look at more stories and videos by Michael Finney and 7 On Your Side.

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