New York Finalizes Stronger Consumer Protection Laws And How It Will Affect Debt Collectors

New York has just enacted the FAIR Business Practices Act, a major overhaul of its main consumer protection statute that now bans not only deceptive but also unfair and abusivebusiness practices.​

What New York Just Did

• Governor Kathy Hochul signed the Fostering Affordability and Integrity Through Reasonable (FAIR) Business Practices Act into law in December 2025.​

• This is the first significant update to New York’s primary consumer protection law (General Business Law §349) in about 45 years.​

• The change was championed by Attorney General Letitia James, Senator Leroy Comrie, and Assemblymember Micah Lasher.​

Key New Protections

• The law expands the old ban on “deceptive” acts to cover “unfair, deceptive, or abusive” acts or practices, aligning New York with most other states.​

• An “unfair” practice is defined as causing substantial injury that consumers cannot reasonably avoid and that is not outweighed by benefits to consumers or competition.​

• An “abusive” practice includes materially interfering with a person’s understanding of terms, or taking unreasonable advantage of lack of understanding, inability to protect their interests, or reasonable reliance on a business to act in their interests.​

Examples Of What It Targets

• State officials have pointed to predatory lenders, abusive debt collectors, dishonest mortgage servicers, AI-driven scams, junk fees, hard‑to‑cancel subscriptions, online phishing, deed theft, and data misuse as conduct the law is meant to address.​

• The law is also framed as a tool to tackle hidden or misleading fees and other cost‑raising practices that harm working families and small businesses.​

Enforcement And Lawsuits

• The Attorney General gains broader authority to bring actions for unfair and abusive practices, not just deceptive ones.​

• Private plaintiffs are also expected to find it easier to sue under the expanded standard, bringing New York closer to the “UDAAP” (unfair, deceptive, or abusive acts or practices) model used in many other states.​

How It Fits Nationally

• The update comes as federal consumer protection enforcement is being scaled back, including efforts to weaken or dismantle the Consumer Financial Protection Bureau, so New York is positioning itself as an aggressive state‑level enforcer.​

• New York’s law now more closely mirrors the broader protections and UDAAP frameworks that exist in roughly 40+ other states and under federal Dodd‑Frank standards.​

If you share whether you are in New York as a consumer or a business, a brief breakdown of practical implications (what to watch for, compliance steps) can be provided.

The FAIR Business Practices Act will significantly increase legal and regulatory risk for debt collectors in New York, especially around practices that exploit confusion, pressure vulnerable consumers, or touch protected income like Social Security.​

What Changes For Debt Collectors

• Debt collectors now face state liability not just for “deceptive” conduct but also for “unfair” and “abusive” acts or practices, similar to federal UDAAP standards.​

• The Attorney General can pursue injunctive relief, restitution, and civil penalties for unfair or abusive collection conduct, expanding beyond prior law’s narrower focus.​

Examples Of Targeted Collection Conduct

• State materials explicitly flag “abusive debt collectors that call you often and repeatedly” and debt collectors “stealing Social Security benefits” as conduct the Act is intended to stop.​

• Other highlighted abuses include tactics that prey on consumers with limited English proficiency or obscure key pricing, fees, and terms related to repayment or collection.​

How “Unfair” And “Abusive” Apply To Collection

• A practice is “unfair” if it causes substantial injury that consumers cannot reasonably avoid and that is not outweighed by benefits, which can cover aggressive fee add‑ons, exploitative payment plans, or collection on amounts not really owed.​

• A practice is “abusive” if it materially interferes with a person’s ability to understand terms or takes unreasonable advantage of lack of understanding, inability to protect their interests, or reasonable reliance on the collector or creditor.​

Interaction With Existing Debt Collection Laws

• The FAIR Act layers on top of the federal Fair Debt Collection Practices Act (FDCPA), which already bans harassment, false threats of arrest or lawsuits, and misrepresentation of amounts owed.​

• New York’s existing debt‑collection rules and the Consumer Credit Fairness Act remain in place; the FAIR Act gives the Attorney General a broader theory (unfair/abusive) to challenge conduct that might not fit neatly under traditional deception or FDCPA provisions.​

Practical Implications For Collectors

• Collection agencies operating in New York will need to reassess call frequency, scripts, settlement offers, fee practices, and treatment of protected income to ensure they do not create substantial unavoidable harm or exploit consumer vulnerability.​

• Firms should expect more investigations and enforcement actions from the Attorney General focused on systemic patterns of unfair or abusive collection, especially involving low‑income consumers, older adults, and those relying on exempt benefits.​