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New York Adopts Landmark Consumer Protection Law

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New York Adopts Landmark Consumer Protection Law

New York State has taken a significant step to bolster consumer protections with the signing of the Fostering Affordability and Integrity Through Reasonable ("FAIR") Business Practices Act. Governor Kathy Hochul officially signed the legislation into law on December 20, 2025, marking the first major update to the state’s consumer protection laws in 45 years. This landmark law expands the scope of New York’s General Business Law (GBL) §349, which had previously focused only on "deceptive" business practices.

Strengthening Consumer Protections

The FAIR Business Practices Act introduces new safeguards against unfair, deceptive, and abusive business practices. It specifically addresses unscrupulous actions that have cost New Yorkers money and left them vulnerable to predatory practices. These include deceptive actions by lenders, abusive debt collection methods, and unfair billing practices by healthcare companies. The law also seeks to protect individuals with limited English proficiency, ensuring they are not taken advantage of through obscure pricing and hidden fees.

Attorney General Letitia James emphasized the importance of the legislation, stating: "The FAIR Business Practices Act will help us tackle rising costs and protect working families and small businesses. I am proud to have worked alongside Senator Comrie and Assemblymember Lasher to update our most important consumer protection law for the first time in 45 years to stop predatory lenders, abusive debt collectors, dishonest mortgage servicers, and so much more."

Key Provisions of the Law

Among its many provisions, the new law brings New York in line with the majority of other states by prohibiting "unfair" and "abusive" practices in addition to deceptive ones. According to the law, an "unfair" act is one that causes or is likely to cause substantial injury to consumers that cannot be reasonably avoided and is not outweighed by benefits to consumers or competition. "Abusive" practices are defined as those that interfere with a consumer’s understanding of a product or service’s terms or take unreasonable advantage of their lack of knowledge or ability to protect their interests.

Specific examples of exploitative practices targeted under the new law include:

  • Student loan servicers steering borrowers into higher-cost repayment plans.
  • Car dealers charging for add-ons that were not purchased or refusing to return a customer’s photo ID until a deal is finalized.
  • Nursing homes suing relatives of deceased residents for unpaid bills without legal grounds.
  • Debt collectors seizing Social Security benefits, which are exempt from collection.
  • Health insurance companies providing misleading in-network provider lists.

The legislation also significantly increases penalties for violations. Civil penalties for unfair, deceptive, or abusive practices now reach up to $5,000 per violation, while knowing or willful violations could result in penalties of at least $15,000 or three times the restitution amount. Private plaintiffs can seek actual and punitive damages, with statutory damages rising from $50 to $1,000 and attorneys’ fees recoverable for prevailing plaintiffs.

A Modernized Approach

Senator Leroy Comrie, a supporter of the FAIR Act, highlighted the need for the legislation, saying, "Far too many consumers and small businesses across New York state have faced deceptive financing schemes, abusive contract terms, and predatory practices that have spiraled individuals and smaller businesses into insolvency and legal battles they often cannot afford. With this bill becoming law, that ends today."

The law also removes several judicially imposed limitations under the original GBL §349, such as requirements for consumer-oriented practices or patterns of conduct. Now, even single instances of unfair, deceptive, or abusive acts are enforceable by the New York Attorney General or private plaintiffs.

Assemblymember Micah Lasher underscored the broader impact of the law, stating, "Today is a victory for every New York consumer. With Governor Hochul’s signature, the FAIR Business Practices Act becomes law in New York, and we are sending an unmistakable message: while the Trump administration abandons working families, New York will stand up and fight back."

What This Means for New Yorkers

This comprehensive reform reflects New York’s commitment to protecting its residents from harmful business practices. By updating its consumer protection framework, the state aims to ensure fairness in transactions and prevent the exploitation of vulnerable individuals and small businesses. The FAIR Business Practices Act provides powerful enforcement tools for the Attorney General’s office and opens the door for private plaintiffs to seek justice for harmful practices.

Governor Hochul, Attorney General James, and lawmakers like Senator Comrie and Assemblymember Lasher have positioned New York as a leader in consumer advocacy with this groundbreaking legislation. As Attorney General James stated, "This law will help us stop companies from taking advantage of New Yorkers. I thank Governor Hochul, Senate Majority Leader Stewart-Cousins, and Assembly Speaker Heastie for their leadership and look forward to working together to make our state more affordable."

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