New York State Passes Consumer Protection FAIR Act

Albany, New York – The New York state legislature has passed a significant piece of legislation known as the “Fostering Affordability and Integrity through Reasonable Business Practices Act” (FAIR Act) aimed at enhancing consumer protections across various sectors. This act, which received backing from Attorney General Letitia James, will empower her office to take legal action against businesses engaging in unfair or abusive practices, augmenting the existing prohibitions against deceptive practices.

The passage of the FAIR Act comes amid growing concerns about federal rollbacks on consumer protections and increasing corporate misconduct. The legislation addresses a wide range of industries that have faced criticism for various predatory practices, including predatory lenders, student loan servicers, health insurance companies, and businesses exploiting consumers with limited English proficiency.

Specific practices targeted by the new legislation include deceptive steering towards higher-cost loans, misleading advertising regarding in-network doctors, car dealerships withholding customer identification, nursing homes suing relatives of deceased residents, and improper handling of Social Security benefits by debt collectors. Such issues have been prevalent in the state, as evidenced by the significant jump in consumer complaints—a reported 114% increase in grievances to the Consumer Financial Protection Bureau compared to the previous year.

Supporters of the FAIR Act emphasized its necessity in modernizing laws that have not seen updates in over five decades. Proponents believe the act will empower the attorney general to address predatory actions that often impact vulnerable populations. With complaints against corporate unfairness on the rise, consumer advocates have underscored the urgent need for this legislative measure.

Despite its favorable vote of 94-48, the FAIR Act faced opposition from Republican lawmakers who expressed concerns over the broad and subjective definitions of “unfair” and “abusive” practices outlined in the bill. Critics from business groups also lobbied against the legislation, arguing that it could potentially lead to increased litigation and disrupt business operations. While the bill underwent amendments in response to some of these concerns, reservations about expanding the attorney general’s authority remain prevalent among its opponents.

Notably, the new measures will allow the attorney general to take action against unfair practices, even if such actions do not affect a large number of consumers. Although the finalized version of the bill removed provisions that would enable individual consumers to sue for unfair practices, its supporters argue that it still offers necessary safeguards against exploitation in the marketplace.

If Governor Kathy Hochul signs the FAIR Act into law, it will align New York’s consumer protection regulations with those of 42 other states, thereby updating and modernizing protocols essential for today’s commerce. This move is anticipated to enhance consumer confidence and provide a more equitable marketplace for all New Yorkers.