TX AG Charges 2 Hotels with Violating TX Deceptive Trade Practices Act During Hurricane Dolly

Texas Attorney General Greg Abbott charged Motel 6 – Harlingen and Best Western Las Palmas Inn with unlawfully increasing room rates during Hurricane Dolly. According to the state’s enforcement actions, the defendants charged excessive or exorbitant rates in an attempt to illegally profit from a declared disaster.

On July 22, 2008, with Hurricane Dolly approaching the South Texas coast, Gov. Rick Perry issued a disaster declaration. As a result, federal, state and local officials urged Gulf Coast residents to evacuate certain areas as soon as possible. The Governor’s disaster declaration triggered special provisions of the Texas Deceptive Trade Practices Act which prohibit vendors from selling or leasing fuel, food, lodging, medicine or other necessities at an excessive or exorbitant rate.

“The defendants are charged with unlawfully increasing room rates at their hotels in an attempt to profiteer from Hurricane Dolly,” Attorney General Abbott said. “To protect evacuees and other storm victims, Texas law prohibits vendors from attempting to increase profit margins after the Governor issues a disaster declaration. An investigation by the Office of the Attorney General indicates these defendants raised their prices in violation of Texas law.”

Investigators with the Office of the Attorney General (OAG) uncovered pricing data that revealed Motel 6 – Harlingen increased room charges after the disaster declaration was issued. According to the investigators’ analysis, the cost to stay in 34 of the defendant’s 49 rooms increased by 20% or more after a disaster was declared. Similarly, investigators revealed that Best Western Las Palmas Inn, increased rates on 43 of 44 rooms. According to court documents filed by the state, the cost of 21 of those rooms increased by 20% or more after the disaster declaration was issued.

The OAG is seeking civil penalties of up to $20,000 per violation and up to $250,000 per violation for victims over 65.

SS