In March 2025, Office of the Attorney General for the State of New York introduced the Fostering Affordability and Integrity Through Reasonable (“FAIR”) Business Practices Act in the State Senate and State Assembly. The proposed legislation is intended to revise Article 22-A of New York’s General Business Law.
The FAIR Act is designed to expand and strengthen consumer and small business protections, in part, by amending New York’s General Business Law §349 to also cover “unfair” and “abusive” practices, rather than just “deceptive” practices. Many other states have already enacted UDAP statutes. The bill may foreshadow what is to come from numerous state consumer protection enforcers as federal consumer protection enforcement is being rolled back and policy under the current administration remains uncertain.
As drafted, the bill would provide the New York Attorney General and private plaintiffs the ability to seek enhanced civil penalties and restitution in amounts significantly more than available statutory damages pursuant to New York General Business Law Section 349. The FAIR Act would significantly increase statutory damages available under GBL §349 from $50 to $1,000, and permit recovery of actual and punitive damages. Penalties for unfair, deceptive or abusive practices could potentially include penalties of up to $5,000, per violation. Knowing or willful violations could result in penalties totaling the greater of $15,000 or three times the amount of restitution, per violation. Prevailing plaintiffs in private actions would also be permitted to recover attorneys’ fees and costs.
Analogous to federal policy, the proposed legislation provides for enhanced civil penalties for harm to vulnerable people, veterans and those with limited English proficiency. The FAIR Business Practices Act contemplates stopping lenders, including auto lenders, mortgage servicers, and student loan servicers, from deceptively steering people into higher cost loans. It would purportedly reduce unnecessary and hidden fees and stop unfair billing practices by health care companies.
The bill would also permit the NY AG and private plaintiffs (individuals, small businesses and non-profits) to enforce even a single instance of unfair, deceptive and abusive acts and practices, including, but not limited to, false advertising. Moreover, its prohibitions apply regardless of whether the act or practice is “"consumer-oriented,” possesses a “public impact,” or is part of a “pattern of conduct” – judicially imposed limitations that presently exist pursuant to GBL §349.
“This legislation will strengthen New York’s consumer protection law, 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. Forty-two other states and federal law already prohibit unfair practices, making New York’s current law both antiquated and inadequate,” according to the NY Office of the Attorney General.
New York’s current consumer protection law, GBL §349, currently prohibits only deceptive business acts and practices, not unfair or abusive acts by companies and individuals. The FAIR Business Practices Act is designed to protect New Yorkers from unfair and abusive business acts, such as:
- The imposition of hidden “junk fees” in various industries
- Companies that make it difficult for consumers to cancel subscriptions
- Student loan servicers that steer borrowers into the most expensive repayment plans
- Car dealers that refuse to return a customer’s photo ID until a deal is finalized and charge for add-on warranties that the customer did not actually purchase
- Nursing homes that routinely sue relatives of deceased residents for their unpaid bills despite not having any basis for liability
- Companies that take advantage of consumers with limited English proficiency and obscure pricing information and fees
- Debt collectors that collect and refuse to return a senior’s Social Security benefits, even though they are exempt from debt collection
- Health insurance companies that use long lists of in-network doctors who turn out not to accept the insuranc
The proposed legislation reflects the federal Consumer Financial Protection Act that prohibits unfair, deceptive or abusive acts and practices (“UDAAP”)
The Fair Business Practices Act provides specific definitions for the following terms:
- Unfair: An act or practice is considered unfair when it causes or is likely to cause substantial injury to a person, the injury is not reasonably avoidable by such person, and the injury is not outweighed by countervailing benefits to consumers or competition. Note, however, that the FAIR Act’s definition of “unfair” does not possess a provision similar to the CFPA’s § 5531(c)(2) that permits regulatory agencies to weigh public policy when assessing whether an act or practice is unfair.
- Deceptive: An act or practice is deceptive when the act or practice misleads or is likely to mislead a person and the person's interpretation of the act or practice is reasonable under the circumstances
- Abusive: An act or practice is abusive when it materially interferes with the ability of a person to understand a term or condition of a product or service, or it takes unreasonable advantage of (i) a person's lack of understanding of the material risks, costs, or conditions of the product or service; (ii) a person's inability to protect such person's interests in selecting or using a product or service; or (iii) a person's reasonable reliance on a person covered by this section to act in such person's interests.
New York business groups have criticized the consumer protection bill intended to strengthen consumer protection against deceptive practices such as junk fees and hard-to-cancel subscriptions. Business groups are pushing back against the bill, asserting that the legislation would be exploited, resulting in frivolous and abusive litigation that could also include class action litigation – thereby weakening New York’s ability to attract and keep commercial enterprise.
Affirmative defenses to the Fair Business Practices Act could potentially include, without limitation, a private plaintiff meeting minimum threshold standing requirements, the alleged harm being capable of remedy via federal securities or intellectual property laws, and/or the alleged harm arising during the course of a high-value experienced commercial transaction and directed to the involved parties only. Contact a States Attorney General law firm if you or your business are the subject of a New York State or other State Attorney General subpoena or inquiry.
Notably, the FAIR Business Practices Act would not permit compliance with federal rules to be a complete defense. Rather, the Act creates a narrowed affirmative defense available provided that the act or practice is required or specifically authorized by the rules and regulations of, and the statutes administered by, the Federal Trade Commission or other federal agencies.
The Act is intended to expand consumer and small business protections, and enhance the scope of available remedies. If passed, it is anticipated that the law will result in a dramatic increase in private consumer lawsuits, and New York State Attorney General investigations and enforcement.
Takeaway: New York's existing consumer protection law is primarily governed by GBL §349 which focuses primarily on “deceptive” acts and practices. According to the Office of the New York Attorney General, GBL §349 is insufficient to adequately protect New Yorkers from technological advances and unfair practices associated therewith. Businesses operating in New York should consult with an experienced Attorney General defense lawyer and keep an eye on the progress of the proposed legislation. The FAIR Act, as drafted, would increase the damages available in a private right of action from the greater of $50 or actual damages under current law to $1,000 in statutory damages, plus the aggrieved person’s actual damages, if any. In cases involving willful or knowing violations, courts would be required to award treble damages, reasonable attorneys’ fees and costs to a prevailing plaintiff. The Act would also permit class action lawsuits to recover actual, statutory or punitive damages if the prohibited act or practice has caused damage to others similarly situated. The availability of supplemental civil penalties for vulnerable persons would also be significantly expanded. If enacted into law a seasoned State Attorneys General law firm can assist with the implementation of business practices designed to comply with applicable New York State legal regulatory requirements, including, but not limited to additional restrictions relating to “unfair” and “abusive” acts or practices, and the review of applicable business and advertising practices.
