New York’s Consumer Protection Laws Are Poised For Expansion

ALBANY — New York consumers could be protected from “unfair, abusive and deceptive” business practices under a measure passed by the state Legislature Tuesday. Democrats and civil legal rights groups say it would shore up the state’s ability to crack down on corporate misbehavior as similar federal-level protections are pared back.

The “Fostering Affordability and Integrity through Reasonable Business Practices Act” would broaden the scope of New York’s consumer protection laws, making actions deemed “unfair” or “abusive” punishable by law in addition to “deceptive” business practices, which are already prohibited. The measure has been championed by state Attorney General Letitia James and essentially grants her office the legal backing to take aim at corporations that state officials find are acting in a predatory manner or infringing on certain consumer rights.

Over the last 55 years, corporate consolidation and the “reinvention of commerce” have drastically altered the business landscape and made updated protections built into business law necessary, said Assemblyman Micah Lasher, a Manhattan Democrat who sponsored the bill.

“We have done nothing to modernize our laws to protect New Yorkers from being taken advantage of and to enable the attorney general to take action against corporate misconduct,” Lasher said during a debate on the measure Tuesday night. “We are, in effect, asking the attorney general to protect New Yorkers in 2025 with tools built in 1970.”

The bill’s proponents have said it would apply to many industries. Predatory lenders, including student loan servicers and auto lenders, would be prohibited under the bill from deceptively steering people to higher cost loans. Health insurance companies would be prohibited from advertising in-network doctors that ultimately do not accept that insurance policy. And companies that take advantage of consumers who speak limited English would leave themselves open to being punished under the measure.

Other examples of practices targeted under the new law, according to the attorney general’s office, include car dealers refusing to return a customer’s photo ID until after a deal has been struck; additional costs for warranties that were not purchased by consumers; nursing homes bringing lawsuits against relatives of dead residents for unpaid bills, and debt collectors refusing to return Social Security benefits.

The bill also would apply to deed theft, an issue James has focused on in the past.

Republicans debating the bill on Tuesday night took issue with some of the subjectivity they said would be attached to claims of “abusive” or “unfair” business behavior. Gov. Kathy Hochul must sign off on the bill for it to become law.

There is some evidence that consumer complaints are increasing across New York. In the Capital Region, complaints submitted to the Consumer Financial Protection Bureau were up nearly 114 percent compared to last year, according to the nonprofit organization Student Borrower Protection Center.

The Consumer Financial Protection Bureau was created after the 2008 market crash and subsequent recession as a watchdog agency that enforces federal consumer financial laws. It was targeted in February as part of a sweeping crackdown under the Trump administration on what White House officials have deemed financial bloat, fraud and waste. Those efforts to trim the workforce at that agency and dramatically limit its scope are being challenged in federal court.

Democrats like James have argued the state must act to fill the void of regulatory responsibility left if the Consumer Financial Protection Bureau is ultimately condensed.

“Too many New Yorkers are being taken advantage of by mortgage servicers charging unnecessary high fees, debt collectors stealing Social Security benefits, and health insurance companies with unfair billing practices,” James said in a statement. “The FAIR Business Practices Act will close loopholes that make it easy for New Yorkers to be cheated out of their time and hard-earned money.”

Business groups had pushed back on the bill, including the The Business Council of New York State, Partnership for NYC and insurance trade associations. Lasher had called the movement to block the legislation a “bad faith lobbying effort” and has said there remains more room for expanding the consumer protections in New York in future legislative sessions.