News Summary
The New York legislature has passed the FAIR Business Practices Act, marking a significant update to consumer protection laws. This act empowers the Attorney General to enforce actions against unfair and abusive business practices, expanding the scope of liability under General Business Law § 349. This legislative change aims to increase consumer protection litigation and align state laws with federal regulations, addressing the rights of consumers while improving the regulatory framework in New York.
Albany, NY – On June 18, the New York legislature passed the Fostering Affordability and Integrity through Reasonable Business Practices Act, commonly known as the FAIR Business Practices Act. This significant legislative move marks the first alteration to New York’s consumer protection laws in 45 years and is expected to empower the state’s Attorney General in consumer protection enforcement.
If signed by Governor Kathy Hochul, the Act will expand liability under New York General Business Law § 349, which traditionally covered “deceptive” acts only. The new provisions will now include both “unfair” and “abusive” practices as well, thereby broadening the spectrum of commercial activities that fall under GBL § 349.
The legislation has been introduced amid a national trend of diminishing federal consumer protection enforcement and regulation. With this Act, New York is stepping up to fill the gap and bolster its consumer protection framework. The anticipated outcome includes an increase in consumer protection litigation, further enhancing the rights and protections afforded to New Yorkers.
Key Revisions in Consumer Protection
A significant aspect of the FAIR Business Practices Act is its clear definition of unfair and abusive practices. The act aligns these definitions with existing federal regulations. Specifically, the term “unfair” will refer to practices that result in substantial consumer harm that cannot be reasonably avoided, drawing from the Federal Trade Commission Act. Meanwhile, “abusive” practices take into account actions that impede consumers’ understanding of product terms or exploit a consumer’s lack of comprehension.
Illustrative examples of what constitutes abusive practices include hindering cancellation of subscriptions, presenting misleading lists of in-network doctors, and steering borrowers toward costly repayment plans. Under this new framework, only the Attorney General will have the authority to enforce the prohibition on these unfair or abusive acts and practices.
Preserving Consumer Rights
The FAIR Business Practices Act also preserves the existing private right of action available for consumers harmed by deceptive practices under GBL § 349. Furthermore, it will remove the current consumer-oriented doctrine that limits the scope of actionable deceptive practices. This removal could allow the Attorney General to pursue lawsuits concerning practices that, while not consumer-oriented, still lead to significant public adverse effects.
Strengthening the Attorney General’s Role
This law is anticipated to enhance the New York Attorney General’s capacity to tackle unfair and abusive commercial practices that have previously evaded regulatory scrutiny. The changes made under the Act potentially enable the Attorney General to pursue claims that typically do not fall within traditional antitrust frameworks. This aims to ensure fair treatment and transparency in business practices across the state.
Context and Implications
The passage of the FAIR Business Practices Act is indicative of a broader initiative among state attorneys general to reinforce consumer protection amid a backdrop of reduced federal oversight. By embracing these changes, New York aligns its consumer protection laws with those of other states that address unfair and abusive acts more comprehensively than mere deception.
In conclusion, the FAIR Business Practices Act represents a significant leap forward for consumer protection law in New York, facilitating a more robust enforcement mechanism by the Attorney General’s office. As the Act awaits the Governor’s signature, its potential impacts on consumer rights and business practices in New York could be far-reaching.
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Additional Resources
- News10: New York Strengthens Consumer Protections with FAIR Act
- Democrat & Chronicle: NY Moves to Strengthen Consumer Protections
- WilmerHale: New York Legislature Passes FAIR Business Practices Act
- Spectrum Local News: NY Legislature Clears AG-Backed Consumer Protection Bill
- Google Search: FAIR Business Practices Act New York
