New York is taking steps to enhance consumer protections with new legislation aimed at curbing unfair business practices. Attorney General Letitia James has proposed the FAIR Business Practices Act, which is currently being supported in the state legislature by Senator Leroy Comrie and Assemblymember Micah Lasher. This new law aims to update New York’s consumer protection laws, which have not seen significant changes since 1970.
The current law, General Business Law §349, only addresses deceptive acts, leaving consumers exposed to unfair and abusive tactics. The FAIR Business Practices Act seeks to tackle issues like predatory lending, hidden fees, misleading subscription policies, deceptive healthcare billing, and online scams. The legislation would also empower the Attorney General’s office to impose penalties on businesses that engage in these harmful practices.
One key focus of the bill is to prevent predatory lending from auto lenders, mortgage companies, and student loan servicers. It also aims to regulate aggressive debt collection practices, particularly those targeting seniors. The law would increase transparency in online transactions and offer protections for consumers with limited English proficiency, as well as ensuring fair practices for small businesses.
Attorney General James has highlighted the urgency of this legislation, pointing out that many New Yorkers face challenges from confusing cancellation policies, misleading loan agreements, and exploitative fees. She believes the bill will help address these problems and hold businesses accountable.
Support for the legislation has come from various experts, including former Federal Trade Commission chair Lina Khan, who emphasized the need for stronger state protections against deceptive financial schemes. Rohit Chopra, a former head of the Consumer Financial Protection Bureau, noted that states must enhance consumer protections as federal oversight declines.
Senator Comrie stated that the bill is crucial for protecting small businesses and working-class families, many of whom have been victims of unfair financial practices. Assemblymember Lasher added that stronger consumer protections would help ensure companies cannot exploit unsuspecting customers.
The proposed act specifically targets common predatory practices, such as complicated subscription cancellations, car dealerships withholding customer identification until a deal is finalized, nursing homes improperly suing family members for unpaid bills, and debt collectors illegally seizing Social Security benefits. It also addresses misleading claims about health insurance coverage.
The FAIR Business Practices Act has been introduced in both the New York Senate and Assembly and is expected to undergo committee review before a full vote. Attorney General James is committed to advocating for its passage, arguing that stronger state-level protections are increasingly necessary as federal consumer safeguards weaken.
Under the new law, businesses could face civil penalties of up to $5,000 for violations. If a violation is found to be willful or occurs during a significant market disruption, penalties could increase. Consumers harmed by unfair practices could sue for statutory damages, actual damages, or even triple damages if the violation is willful. The Attorney General would have the authority to seek injunctions and take action against repeat offenders.
This legislation aims to fill a significant gap in New York’s consumer protection laws, ensuring that consumers have the tools they need to fight back against unethical business practices.