Long Island Gas Station Owners Accused of Consumer Fraud
August 29th, 2008 laurie
Attorney General Andrew Cuomo’s office said a third of Long Island gas stations inspected, or about 43, and about one in five of city stations inspected, or about 30, violated state business practice and consumer fraud laws by using “deceptive practices” and “overcharging” for credit card purchases. And yesterday, he issued a “consumer alert” reminding drivers of the inspections, Newsday reports.
But Long Island gas retailers say they were wronged by accusations from the state attorney general last week that many of them engaged in false advertising, and complain that motorists are showing their anger based on the allegations. Retailer trade groups insist members comply with state laws, discounting for cash purchases but not surcharging for credit card purchases, which is illegal. Gasoline stations are charged fees by credit card companies.
“They portrayed us like crooks,” said Kevin Beyer, president of the Long Island Gasoline Retailers Association. Since stations charge varying prices, Beyer questions how regulators can determine if a station is surcharging for credit or discounting for cash.
Cuomo’s chief of staff, Steven M. Cohen, said yesterday the office based its suspicions about surcharges for credit purchases on average prices in the area. He said letters sent to the stations in question asked them to prove that it was not a surcharge. “We said it would appear that the price you are offering as a discounted price [for cash purchases] is essentially the price everybody else is offering as the market price.”
Particularly grating on the retailers was the statement in Cuomo’s news releases saying the stations “engaged in false advertising by only listing the lower cash prices on their street view signage in order to lure patrons to the pump.” A story last week about the Long Island investigation said “both prices - one for cash and one for credit card payment - must be listed on all signs.”
Yesterday, both Beyer and Cohen said that’s inaccurate. State law allows retailers, if they wish, to post only the lower cash price on their large signs near the street as long as they make clear on the sign that the price is only for cash purchases and that signs on the pumps list both cash and credit prices.
“He [Cuomo] gave out the wrong information to the public and everybody ran with it,” said Beyer, who added that some consumers have reacted angrily. “I had a customer in here yelling, ‘I’m going to call the police.’”
Cohen said, however, that many of the station owners who were sent letters of warning did not make clear on the street signs the price was for cash only. “The law requires that you not deceive consumers,” he said.
