New York strengthens consumer protections with FAIR Act amid federal rollbacks

ALBANY, N.Y. (NEXSTAR) — New York lawmakers passed new legislation to protect consumers and small businesses from predatory practices. The Fostering Affordability and Integrity through Reasonable Business Practices Act—or the FAIR Business Practices Act—updates a state law 45 years dormant to give the attorney general the power to pursue legal action for unfair and abusive treatment from a company or industry.

S8416/A8427A would expand the consumer protection law, General Business Law §349. This 1970 statute prohibiting “deceptive business acts and practices” would now include acts or practices deemed unfair or abusive. If signed by Governor Kathy Hochul, New York would align with 42 other states—and federal law—with such bans already on the books, according to AG Letitia James.

According to James, who championed the bill, it would close “loopholes that make it easy for New Yorkers to be cheated out of their time and hard-earned money.”

The FAIR Act authorizes the AG to sue individuals, firms, corporations, companies, partnerships, or associations that engage in or plan to engage in such unfairness, deception, or abuse. The person or business doesn’t have to be in New York if the conduct in question involved business, trade, or commerce in the state.

The bill would enshrine the AG’s ability to take action even if it doesn’t affect a large number of individual shoppers. This would eliminate some current limitations on the AG’s enforcement power.

A business’s action or behavior would be “unfair” if it damages or could damage an individual consumer, a nonprofit, or another business, and that damage can’t be easily avoided. The damage would also have to outweigh any positive consequences.

And it would be “abusive” to interfere with the consumer’s ability to understand the terms and conditions of the product or service. It would be abusive to take advantage of someone who can’t protect their own interest because they trusted the company to protect them or because they failed to grasp the risks, costs, or conditions at hand.

The expansion is supposed to target all manner of modern issues, like AI-based scams, deed theft, predatory lending, hidden junk fees, unfair billing by health care companies, and exploitation of New Yorkers who speak English poorly or not at all. Theoretically, those would include:

• Lenders steering borrowers toward unaffordable loans or more expensive repayment plans
• Student loan companies collecting discharged loans
• Car dealerships refusing to return a customer’s photo identification until a deal finishes
• Car dealerships charging for unwanted add-on warranties
• Nursing homes suing relatives of deceased residents for unpaid bills
• Debt collectors seizing Social Security benefits
• Banks cheating customers out of savings account interest

Momentum behind the state-level change followed weakening federal protections for consumers. James and other supporters of the bill pointed to examples of the feds dropping pending enforcement cases against companies. According to Sam Levine, director of the Federal Trade Commission’s Consumer Protection Bureau under the Biden administration, the federal government “is abandoning its responsibility to protect consumers and small businesses.”

An analysis from the Student Borrower Protection Center on Consumer Financial Protection Bureau data showed 120% more complaints in New York from January to May of 2025 compared to January to May of 2024. The Federal Trade Commission reported 278,662 reports of fraud and other complaints in New York in 2024.

According to Kristen McManus of AARP New York, scammers target older adults more and more. And according to the FBI, New Yorkers over 60 lost over $254 million to fraud in 2024, $50 million more than in 2023.

Even so, the final bill still drew criticism from some consumer advocates. The original bill would have let New Yorkers directly sue businesses in court for all unfair or abusive practices. But the amended bill that passed removed that “private right of action,” meaning that private individuals could only sue for deceptive acts.

That means New York remains one of only eight states with such a limitation, said Susan Shin of the New Economy Project. She expressed dismay that the legislature caved to the business lobby and passed a watered-down version of the FAIR Act.

She argued that New Yorkers still can’t take on employers, landlords, or debt collectors for being unfair or abusive without being considered deceptive. Shin called the bill “Albany at its most cynical: bending to corporate pressure while pretending to act in the public interest.”

Over 50 community groups, labor unions like the New York State AFL-CIO and American Federation of State, County, and Municipal Employees, and legal service organizations backed the bill. Supporters, including Ariana Lindermayer, a senior staff attorney at Mobilization for Justice, said that criticism of the bill’s potentially vague standards or fears about frivolous lawsuits were hyperbolic and dishonest. According to the Empire Justice Center, amendments addressed any “good-faith concerns.”