New York Attorney General Proposes FAIR Business Practices Act

News Summary

New York Attorney General Letitia James has proposed the FAIR Business Practices Act to enhance consumer protections against deceptive business practices, addressing issues like junk fees and deed theft. The legislation aims to shield consumers from predatory lenders and improve transparency in business practices. However, it faces opposition from various business groups who worry it may increase litigation risks for small businesses. Should it pass, the act would align New York’s consumer protection laws with those of 42 other states.

New York—New York Attorney General Letitia James has proposed a new piece of legislation titled the Fostering Affordability and Integrity through Reasonable Business Practices Act, commonly referred to as the FAIR Business Practices Act. This proposed act aims to bolster consumer protections against deceptive business practices. It specifically targets issues such as junk fees, deed theft, and hard-to-cancel subscriptions.

The legislation, which requires legislative approval to become law, is expected to extend protections for consumers across various sectors. It aims to shield businesses from predatory lenders and protect homeowners from problematic mortgage services. Additionally, it seeks to provide safeguards for patients against abusive debt collection practices that have become increasingly prevalent.

James addressed the need for this act by asserting that federal protective measures for consumers have diminished, necessitating state-level intervention. Under the provisions of the FAIR Act, the Office of the Attorney General would gain the authority to target fraudulent activities linked to student loans, data breaches, and misleading health insurance information.

However, not all stakeholders are in favor of the proposed legislation. Several business groups, including the Business Council of New York and the Lawsuit Reform Alliance of New York, have voiced their opposition. They argue that the FAIR Business Practices Act could lead to what they describe as “legal shakedowns” that specifically target small businesses. Critics express concerns that the act contains vague language which might lead to litigation and exploit small enterprises.

Opponents point out that the FAIR Act could remove existing legal safeguards that protect against frivolous lawsuits, asserting that ordinary business actions could escalate into lengthy, expensive court cases. For example, Tom Stebbins, executive director of the Lawsuit Reform Alliance, remarked that the act could overwhelm New York’s business community with unlimited liabilities.

The legislation was introduced in the state Senate by Leroy Comrie (D-Queens) and in the Assembly by Micah Lasher (D-Manhattan), with additional support from Senator Samra Brouk (D-Rochester). If passed, the FAIR Business Practices Act would align New York’s consumer protection laws with those of 42 other states, which currently have enacted regulations against unfair business practices.

Significant changes outlined in the proposed act include provisions that bar lenders from misleading consumers into high-interest loans and mandate a reduction of hidden fees that often burden consumers. Importantly, the act proposes to increase civil penalties for violations from $50 to $1,000, and it introduces provisions for punitive damages in cases of severe misconduct.

If the FAIR Business Practices Act is signed into law by Governor Kathy Hochul, its provisions would take effect within 60 days. James emphasizes that this act is vital for ensuring transparency and accountability in business practices that are currently detrimental to consumers across New York State.

As the debate unfolds, the implications of the FAIR Business Practices Act will be closely monitored by both consumer advocates and business representatives, with discussions focusing on balancing consumer rights with the operational realities of small businesses.

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Additional Resources

• New York Daily Record
• Law360
• National Law Review
• Democrat and Chronicle
• Google Search: Consumer Protection Laws