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New York attorney general launches Sandy price-gouging probe

NEW YORK (Reuters) - New York State Attorney General Eric Schneiderman on Monday launched an investigation into post-storm price gouging after consumers flooded his office with complaints about jacked-up prices for everything from gasoline to hotel rooms.

Schneiderman's announcement came as AAA, the national auto club which tracks gas price trends, said prices in some storm-stricken zones have risen as much as 15 cents a gallon in the week since Sandy struck, even as the national gas price keeps falling.

The attorney general said his office has received hundreds of complaints from consumers in areas of the state hit hardest by Sandy - New York City, the Hudson Valley and Long Island.

Sandy, one of the largest storms ever to strike the U.S. mainland, made landfall one week ago with hurricane-force winds, wreaking havoc along a stretch of coastline from southern New Jersey to New York's Long Island and along the Connecticut shoreline of the Long Island Sound.

At least 113 people have died from storm-related causes in the United States and Canada, and 1.4 million homes and businesses remain without power. The storm has caused widespread gasoline shortages.

The largest number of complaints are related to increased gasoline prices, he said in a statement, but consumers also have reported possible gouging for emergency supplies like generators and hotels raising rates due to "high demand," as well as increased prices for food and water.

"Our office has zero tolerance for price gouging," Schneiderman said. "We are actively investigating hundreds of complaints we've received from consumers of businesses preying on victims."

Before the storm struck the night of October 29, Schneiderman's office warned vendors in the state against price gouging for necessary goods and services.

AAA said Monday that gas prices in New Jersey and New York have increased over the last week in areas most damaged by Hurricane Sandy.

The average price of gas over the last week is up about 15 cents a gallon in Long Island, 9 cents a gallon in New York City and 7 cents a gallon in New Jersey, AAA said. That contrasts with falling gas prices nationally. The national average is down about seven cents over the past week.

General business law prohibits such increases in costs of essential items like food, water, gas, generators, batteries and flashlights, and services like transportation, during natural disasters or other events that disrupt the market, the attorney general said.

(Reporting By Dan Burns and David Sheppard; Editing by Eric Beech and Todd Eastham)

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