IOWA DERECHO 2020

Iowa Attorney General investigating price gouging complaints following derecho

Just because rates are higher than others doesn't mean it's price gouging, says WireOne president

Homes are damaged on the north side of Cedar Rapids on Friday, Aug. 21, 2020. Cleanup continues around the area followin
Homes are damaged on the north side of Cedar Rapids on Friday, Aug. 21, 2020. Cleanup continues around the area following the Aug. 10 derecho, which left hundreds of thousands of Iowans without power and displaced many whose homes were damaged or destroyed in the heavy winds. (Rebecca F. Miller/The Gazette)

The Iowa Attorney General has received nearly 50 complaints of price gouging following the Aug. 10 derecho, with more than half about two companies in the Cedar Rapids and Iowa City areas.

“The bulk of the complaints we’re checking out are related to WireOne,” Attorney General Spokesman Lynn Hicks said about an electrical services firm that serves Cedar Rapids, Iowa City, Davenport, Dubuque, Des Moines, Kansas City and Madison, Wis.

People who complained said WireOne was charging a $299 emergency services fee and charging far more than other electricians after the storm, Hicks said.

But WireOne CEO and President Jake Wheeler said Wednesday those are the same rates the company has charged since it opened in Cedar Rapids in 2018 — which means it isn’t price gouging.

“We’re doing everything we can to get everyone back up and rolling,” Wheeler said, adding WireOne has served 400 Iowans after the derecho. “We haven’t done anything to take advantage of anyone.”

Wheeler said WireOne charges a $299 emergency services fee for after-hours services and the bulk of that goes to the electrician and the dispatchers who take the calls. The fee is listed on estimates, he added.

“We’re really surprised by the reaction,” he said of the 16 complaints to the Attorney General’s Office and the accusations of price gouging on social media. He said the company has talked with the AG staff and shown proof rates haven’t changed since the storm.

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Iowa’s price gouging law applies only if the price being charged for an item necessary during a disaster declaration is “not justified by the seller’s actual costs of acquiring, producing, selling, transporting and delivering the actual product sold, plus a reasonable profit.”

When the AG’s office confirms price gouging has occurred, the first goal is to stop the practice.

“With most of these complaints, we check them out and it gets corrected,” Hicks said.

The AG then asks the person or company what their regular rates were before the disaster declaration and if anyone was charged the inflated prices.

In the case of the SureStay Plus Hotel in Coralville, the Attorney General confirmed the hotel was listing on sites like Expedia a nightly rate of $3,000 following the storm.

“They are saying the $3,000 was a glitch,” Hicks said. One customer was charged $300 for a night’s stay, but has since been refunded to the hotel’s regular price of $80 a night, Hicks said.

Josh Schamberger, president of the Iowa City/Coralville Area Convention & Visitors Bureau, tweeted about the SureStay’s rates Aug. 14.

“Shame on the @surestayhotels in Coralville, Iowa, for charging $300/night during this challenging time for our community and region. Ridiculous!”

Schamberger said Wednesday he had his staff call around to other Iowa City and Coralville hotels to check on availability and rates following the derecho, which displaced hundreds of people. They found other hotels, including ones with more amenities, were $140 to $150 a night.

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Best Western, the hotel’s parent company, said SureStay, which is independently-owned and operated, has “provided a letter of apology to guests and issued refunds to adjusted rates.”

The AG’s office filed two price gouging lawsuits related to the COVID-19 pandemic, Hicks said. The first, reported by The Gazette in April, was against a Michael Evan Noteboom, of Orange City, who was accused of selling a 12-roll package of toilet paper for $86 and a 12-ounce can of Lysol for $66.

“The two lawsuits we did file were cases where we weren’t getting any cooperation,” Hicks said.

If consumers see what they believe to be price gouging, they can call the attorney general’s Consumer Protection Division at 1- (888) 777-4590, email consumer@ag.iowa.gov or file an online complaint.

Comments: (319) 339-3157; erin.jordan@thegazette.com

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