The New Jersey Division of Consumer Affairs has filed action against a Monmouth County landscaping company, Stephen's Landscaping, d/b/a "Stephen's Garden Center," that allegedly defrauded consumers in the wake of Superstorm Sandy by charging exorbitant prices for generators, and selling gasoline without being a licensed motor fuel retailer. The company also allegedly sold generators that had been recalled due to potential fire hazards occurring with use of these generators.
"Consumers scrambled to find generators, fuel, and other basic necessities during the chaotic days right before and after Sandy's landfall," Acting Attorney General John J. Hoffman said. "This company allegedly took advantage by charging unconscionable prices – and even putting consumers at risk with the sale of generators that had been recalled due to fire hazards."
Acting Director Steve Lee of the Division of Consumer Affairs said, "We have charged Stephen's Landscaping and its owners and officers with taking advantage of the misfortune caused by Superstorm Sandy in order to line their pockets with illegal profits. The Division will do everything possible to punish those who profited illegally by cheating storm victims and to ensure that victims are made whole."
During the State of Emergency declared on October 27, 2012 in advance of Sandy's landfall, Long Branch-based Stephens's Landscaping allegedly sold 133 generators to consumers at exorbitant prices. Specifically, between October 30, 2012 and November 3, 2012, Stephen's Landscaping allegedly sold various models of Powerhorse generators at prices ranging from $800 to $1,550, representing markups of between approximately 82 percent and 155 percent. Within these five days, Stephen's Landscaping realized approximately $176,950 in retail sales for 133 generators.
For 77 of the 133 generators sold during that period, the company also allegedly charged an additional $100 assembly fee. According to one consumer's account, the "assembly process" consisted of removing the generator from a box and attaching handles and two wheels. Multiple consumers said they were not given a choice about paying the assembly fee. Stephen's Landscaping realized $7,700 in gross revenues by adding the allegedly unnecessary assembly fee.
The charging of exorbitant prices is prohibited under New Jersey's Consumer Fraud Act.
Stephen's Landscaping is also alleged to have sold unsafe and recalled generators to consumers. According to the Complaint, Stephen's Landscaping sold recalled Poulan Pro 6600 generators to consumers as recently as the day before Governor Chris Christie declared a state of emergency in New Jersey because of Superstorm Sandy. The manufacturer of the Poulan Pro 6600 had recalled those generators in January 2011 after receiving reports of fuel leakage. In addition, the U.S. Consumer Product Safety Commission had issued an order regarding the recall, stating that Poulan Pro 6600 generators posed a fire hazard.
The sale of such recalled items is prohibited under New Jersey's Hazardous Products Regulations.
In addition, as set forth in the Complaint, during the five days immediately after Superstorm Sandy struck New Jersey, Stephen's Landscaping sold a total of 44 five-gallon gas cans, filled with gasoline, at $50 per can – even though the company was not licensed by the New Jersey Division of Taxation to engage in the retail sale of motor fuel.
The unlicensed sale of motor fuel is prohibited under New Jersey's Motor Fuel Tax Act.
As of the date of this Complaint, Stephen's Landscaping has failed to produce certain documents as required by a subpoena served by the Division of Consumer Affairs. Specifically, Stephen's Landscaping has failed to provide any documents concerning the prices it paid to suppliers for generators purchased and then sold to consumers prior to the declaration of the Superstorm Sandy state of emergency.
Investigator Gilbert Horrach and Supervising Investigator Joseph Singh, of the New Jersey Division of Consumer Affairs' Office of Consumer Protection, conducted this investigation. Deputy Attorney General Natalie A. Serock, of the Consumer Fraud Prosecution Section within the Division of Law, represents the State in this action.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504-6200.
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