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Earlier this week, New York Governor Kathy Hochul signed into law the "Fostering Affordability and Integrity Through Reasonable (FAIR) Business Practices Act." The new law, which was introduced by New York Attorney General Letitia James, greatly expands New York's consumer protection law, prohibiting "unfair" and "abusive" acts or practices.
In announcing the passing of the legislation, AG James said, ""The FAIR Business Practices Act will help us tackle rising costs and protect working families and small businesses. I am proud to have worked alongside Senator Comrie and Assemblymember Lasher to update our most important consumer protection law for the first time in 45 years to stop predatory lenders, abusive debt collectors, dishonest mortgage servicers, and so much more. At a time when the federal government is abandoning working people and raising the cost of living, this law will help us stop companies from taking advantage of New Yorkers."
Section 349 of New York's General Business Law has long prohibited "deceptive" acts or practices. Now, the law has been expanded to prohibit "unfair, deceptive, or abusive" acts or practices.
Under the new law, an "unfair" act or practice "causes or is likely to cause substantial injury which is not reasonably avoidable and is not outweighed by countervailing benefits to consumers or to competition."
An act or practice is "abusive" under the new law when it either "materially interferes with the ability of a person to understand a term or condition of a product or service" or takes "unreasonable advantage" of (a) a lack of understanding on the part of a person of the material risks, costs, or conditions of a product or service, (b) the inability of a person to protect such person's interests in selecting or using a product or service, or (c) the reasonable reliance by a person on a person engaging in the act or practice to act in the relying person's interests.
Although there is a private right of action under Section 349 for deceptive practices, the new law does not expand that right to cover unfair or abusive practices. The new law takes effect sixty days after signing.
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