The state attorney general's office has sent letters to Watertown-area gas stations warning them to stop misleading customers with advertised gasoline prices.
The gasoline station owners said they didn't know they were doing anything wrong.
The letters went to the owners of Valentine Stores Inc., Rajit Inc. and General Store Inc. At least four of the area's Nice N Easy gas stations, owned by Valentine Stores, Rajit's Valero Gas Station, 262 Arsenal St., and the General Store, 816 Bradley St., showed a cash sales price on the large street-view signage to lure patrons to the pump, a news release said.
"The roadside listing of a price without equally prominent disclosure of the higher standard price for credit purchases" violates state consumer-protection law, the letters said.
"What these gas stations did is a classic example of bait and switch. Consumers were lured in by the lower price but when they went to fill up their tanks, they were hit with a higher price if they didn't pay with cash," Attorney General Eric T. Schneiderman said in a news release. "At a time when gas prices are high enough already, my office will work to make sure consumers are not tricked into paying a penny more by such deceptive practices."
General Store owner Anthony J. Doldo said he asked Keith A. Frantz, Jefferson County Weights & Measures Department director, if he could institute a cash-credit pricing system.
"Everybody is going to a cash-credit pricing system," Mr. Doldo said. "I am going to be and I've changed my signage, but I haven't actually changed the price at the pump yet."
So what customers have been charged has been the same, regardless of payment method.
Mr. Frantz said both Mr. Doldo and the Nice N Easy stations' owner contacted him. Different cash and credit card purchase prices become an issue every time gasoline prices peak, Mr. Frantz said.
"In times past, the owners put the word cash on the roadside sign and we've never had complaints," he said. "Since last month, we have not received one complaint."
But the attorney general's office must have, he said.
"The only price signs Weights and Measures Law covers is the signs on top of the pumps," Mr. Frantz said. "They don't have to have a road sign, but if they do, they have to be in agreement with the pump toppers."
So he recommended a sign that stated whether the price listed was the cash price, which both owners installed.
"Cash discount is the type of thing that credit card reform was supposed to promote," Valentine Stores said in a faxed response to the Times. "We put a lot of thought and effort into making sure our sign was clear from the street. Not only did we make the letters larger than the word 'REGULAR' but we also made it fluorescent green to really stand out."
Valentine Stores called the Watertown market "competitive," and said, "We have had hundreds of thousands of customers that have been delighted with our lower pricing and the aggressive competition in the area."
Sunny Chhokar, son of the manager at the Valero station, said the station will have a new sign next week after talking to the attorney general's staff. His family owns gas stations in other cities, but listing the cash price, which applies to cash and debit purchases, has not been an issue before.
"It's the same sign by Valero company that is in other places," Mr. Chhokar said.
But for consumer protection law, the attorney general's office determined that was not enough. If the businesses do not comply, they will face possible court action, the release said. The letters gave the owners five days to notify the office of changes.
The current average price for gasoline in the state is $3.97, according to the American Automobile Association, the release said. Last year at this time, the average price was $2.91.
Prices at the pump have led to an increase in consumer complaints to the attorney general's office, and Mr. Schneiderman has directed his staff to compile data on the prices charged by gas retailers, as well as information on the chain of distribution, to determine the cause behind the continued increases.
The attorney general's office said the roadside listing of a price without equally prominent disclosure of the higher standard price for credit purchases violates General Business Law and the Attorney General's powers to pursue the matter in state Executive Law 63, section 12. There is no state law that explicitly forbids listing a cash-only price or carrying different cash and credit prices.
Consumers who see gas stations prominently advertising a low price on primary signage and then indicating at the pump that credit card customers will be charged more are urged to call the attorney general's consumer help line at 1 (800) 771-7755.