New York Passes the FAIR Business Practices Act
On June 18, the New York legislature passed the Fostering Affordability and Integrity through Reasonable Business Practices Act ("FAIR Business Practices Act"), a program bill meant to prohibit not only deceptive, but also unfair and abusive business practices that harm consumers and small businesses.
The FAIR Business Practices Act, a program bill from the Office of the Attorney General ("OAG") and championed by the state legislature, is set to strengthen New York's consumer protection law, General Business Law § 349 ("GBL §349"), to "protect New Yorkers from a wide array of scams, including deed theft, artificial intelligence (AI)-based schemes, online phishing scams, hard-to-cancel subscriptions, junk fees, data breaches, and other unfair, deceptive, and abusive practices."
The bill is New York's first update to its consumer protection law in over 45 years, but a significant push toward effectively broadening consumer protection law.
GBL §349: The Existing Consumer Protection Law
GBL §349 was passed in 1970 and only prohibits certain "deceptive" business acts and practices, which has left consumers vulnerable to many "unfair" or "abusive" acts by companies for decades.
Per the FAIR Business Practices Act, deceptive acts are practices that "mislead[ ] or is likely to mislead a reasonable person in the relevant market acting reasonably under the circumstances."
Unfair practices can be understood as practices that cause or are likely to cause "substantial injury which is not reasonably avoidable and is not outweighed by countervailing benefits to consumers or to competition."
Abusive acts are practices that "materially interfere[ ] with the ability of a person to understand a term or condition of a product or service" or it "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."
Examples of Unfair and Abusive Practices
According to NY Attorney General James' March 13,2025 press release, examples of unfair and abusive practices include, but are not limited to:
- Lenders, including auto lenders, mortgage servicers, and student loan servicers, deceiving people into higher cost loans or the most expensive repayment plans
- Debt collectors collecting and refusing to return a senior's Social Security benefits, even though they are exempt from debt collection
- Health insurance companies that include doctors who turn out not to accept the insurance in their long lists of in-network providers
- Nursing homes routinely suing relatives of deceased residents for unpaid bills without basis for liability
- Companies taking advantage of consumers with language barriers in efforts to obscure pricing information and fees
- Companies making subscription cancellation extraordinarily difficult
Expanding Protections Beyond Consumers
The FAIR Business Practices Act maintains consumer protection rights of GBL § 349, but also now articulates protection rights for small businesses.
This means that the FAIR Business Practices Act protections extend beyond consumer financial products or services, and the bill expands avenues for legal action in the fields of consumer fraud, unfair competition, and business practice disputes.
As written, the Fair Business Practices Act prohibitions apply to all persons, not just consumers, authorizing the OAG and victims, whether individuals or small businesses, to seek civil penalties and restitution against lenders, vendors, and other predatory businesses that use unfair, deceptive, or abusive practices.
Impact on Businesses Operating in New York
As the federal government rolls back protections for consumers and small businesses, the FAIR Business Practices Act changes the legal landscape for companies operating in New York as it seeks to eliminate abusive and deceptive practices – from online scams, junk fees, and hidden costs, to unfair debt collection and deed theft – that allow exploitative and scheming practices to harm honest businesses in New York state.
The bill reflects a sharp turn toward the New York state legislature's attempt to broaden its consumer protection powers and jurisdiction in the wake of less aggressive enforcement at the federal level, which means businesses operating in New York may want to consider keeping a close eye on state regulatory and compliance measures when it comes to their business practices, whether between themselves and consumers or themselves and other businesses.
Aligning with Miller Shah LLP's Litigation & Dispute Resolution Practice
In a quickly evolving legal landscape, consumer rights and protections are pivotal in upholding fairness, transparency, and trust between businesses as well as between businesses and individuals they provide services to. Combating unfair and abusive business practices that harm consumers and businesses are areas closely aligned with Miller Shah LLP's Litigation & Dispute Resolution practice, which includes representing clients in consumer fraud, unfair competition, and business practice disputes.
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