New York Moves to Strengthen Consumer Protection Laws

Letitia James, New York State Attorney General, recently announced a new bill to protect the state’s consumers and small businesses from deceptive practices and scams from lenders, health care firms, and debt collectors. The new bill, the Fostering Affordability and Integrity through Reasonable (FAIR) Business Act, is a response to the Trump Administration’s efforts to freeze the Consumer Financial Protection Bureau (CFPB).

“The FAIR Business Practices Act will close loopholes that make it too easy for New Yorkers to be scammed, and will allow my office to go after anyone who violates the law and look forward to working with my partners in state government to ensure that as Washington retreats from protecting consumers, New York steps up to lead,” James said in a press release, according to PYMNTS.

The bill would amp up the state’s existing consumer protection laws by allowing New York’s private plaintiffs and attorney general to go after companies engaged in abusive, deceptive, and unfair practices against consumers. Bloomberg Law noted that New York’s current consumer protection law, passed in 1970, prohibits deceptive acts, but does not cover “unfair and abusive” acts.

The act will target practices such as difficulty cancelling subscriptions, steering consumers to the most expensive repayment options, charging for add-on warranties, collecting seniors’ Social Security benefits when they are exempt from debt collection, taking advantage of consumers with limited English proficiency, and suing relatives of deceased nursing home residents for unpaid bills.

When Russell Vought took over the CFPB last month, he fired over 200 employees and stopped nearly all work. While it is unclear what will happen to the Bureau, especially as Director Nominee Jonathan McKernan awaits his confirmation, some state attorneys general and regulators have been stepping up their efforts to address complaints.

CNBC noted that the bill drew support from regulators from President Biden’s administration, including ex-CFPB Director Rohit Chopra and former Federal Trade Commission Chair Lina Khan.

“By passing a strong consumer protection bill, New York lawmakers can empower Attorney General James to fully defend New Yorkers’ pocketbooks, privacy, and economic freedoms,” Khan said.