News and Events Archive
CSPA levels playing field for New Yorkers
Published in The Buffalo News on January 28, 2025
As New York State grapples with the aftermath of corporate tax breaks and regulatory rollbacks, corporations wield more power than the consumers and small businesses that fuel them. The Consumer and Small Business Protection Act (CSPA) is a necessary lifeline for voices silenced by corporate interests. The bill expands consumer protections and empowers consumers to hold bad actors accountable. New York’s General Business Law Section 349 is notoriously weak and is one of just eight laws in the U.S. that fails to safeguard individuals from unfair or abusive practices.
CSPA explicitly expands the law to cover unfair and abusive practices, aligning New York with reasonable federal standards and, in doing so, protects consumers from a wider range of unethical corporate practices. With stronger, clearer language, a more comprehensive scope, and improved mechanisms for redress, the CSPA will increase penalties and statutory damages to deter fraudulent behavior.
Too often, it’s ordinary New Yorkers who bear the brunt of unfair business practices. From predatory lending to false advertising, consumers are exploited by companies that prioritize profit over people. Small businesses face their own challenges. When corporations act unethically, small businesses are caught in the crossfire, competing against unfair advantages while struggling to protect their customers.
Not all consumers are equally vulnerable to exploitation. For many low-income individuals, older adults, and immigrants, the absence of robust consumer protections is not a mere inconvenience but a critical challenge to their economic security. Unscrupulous businesses prey on vulnerable communities’ limited access to resources, legal knowledge, and financial security, deepening inequality. Immigrant families might be taken advantage of and face high-interest loans that lock them into unmanageable debt, while older adults may face exorbitant fees for a service they never even requested.
To oppose this bill is to turn our backs on the very people New York claims to protect.
Megan Gmytrasiewicz, of East Setauket, is a junior in the Cornell School of Industrial and Labor Relations and a member of the university’s State Policy Advocacy Clinic.
For more information, please contact Carolyn E. Coffey, at ccoffey@mfjlegal.org or Winston Berkman Breen at winston@protectborrowers.org.
Memorandum in OPPOSITION to S.795-A
June 6, 2024
BILL NO.: S.795-A
SPONSOR: Senator Comrie
TITLE OF BILL: An act to amend the general business law in relation to enacting the “consumer and small business protection act”
STATEMENT IN OPPOSITION: The Fair Deal NY coalition, which has long supported reforming New York’s consumer protection statute, OPPOSES amendments contained in S.795-A, which will NOT protect consumers and will dangerously roll back consumer protections for New Yorkers. Fair Deal NY is comprised of labor, faith, legal services, community-based, and consumer advocacy organizations that believe that a fair economy is the key to justice for all.
Fair Deal NY is fighting for the right for New Yorkers to live their lives without fear of exploitation. Quite simply, we seek to end abusive and unfair business practices in New York. New York’s consumer protection law, General Business Law § 349, which bans deceptive practices by all businesses, is now limited and outdated. Currently, 42 states and the federal government have more expansive prohibitions. Without a ban on unfair and abusive acts and practices, bad actors avoid the consequences of taking advantage of consumers as long as they do not get caught in a lie. As a result, honest companies that treat their customers fairly are at a competitive disadvantage. Likewise, consumers, especially low-income New Yorkers, communities of color, seniors, and immigrant populations are exploited. Updating New York’s weak statute will deter unscrupulous behavior and will help level the playing field for honest companies that treat their customers fairly. Consumers and small business owners who are tricked, defrauded, deceived, and bilked should be made whole, and then some.
The previous iteration of this bill, S.795, has bipartisan support from 30 Senators, and thoughtfully modernizes New York’s law. However, the amendments contained in S.795-A are dangerous and move us backwards. The bill is untenable for the following reasons:
● First and foremost, S.795A carves key industries, specifically banks, insurance companies, and investment advisors, brokers, and dealers, out of protections, and even curtails the Attorney General’s authority over these industries that engage in unfair and abusive conduct. The current law, which covers “all economic activity,” prohibits all industries from engaging in deceptive acts against New Yorkers. S.795-A therefore weakens the existing law.
● S.795-A removes an essential prong from the definition of “abusive.” This change would place New York law out of conformity with the prevailing standard contained in the Dodd-Frank Act. It also leaves New Yorkers vulnerable to abuse by businesses from which they did not purchase a good or service, for example, a student loan servicer on whom they reasonably relied to protect their interests.
● S.795-A fails to authorize class actions in state court, preventing an essential tool for people to band together to access justice in numbers.
● S.795-A removes tester standing, which originated from the Fair Housing Act and is a means of holding businesses accountable for violations before individuals are forced to suffer personal injury.
● Inexplicably, S.795-A extends the effective date, giving businesses twice as much time to engage in unfair and abusive practices, even though they presumably should have already been complying with this standard under federal law.
● Lastly, the bill imposes a notice requirement that will allow unscrupulous businesses to evade accountability and prevent people from pursuing their compelling claims in court.
We emphasize that carving out banks and insurance companies from the law affords those industries a windfall even though they are among the businesses most needing the accountability that the bill is intended to provide for regular people who are exploited. In fact, in a recent circular letter, the Consumer and Financial Protection Bureau underscored the need to regulate deceptive contracts in banking transactions, including those used in mortgage borrowing and general bank accounts. To carve out entire industries sets a dangerous precedent and leaves large swaths of consumers unprotected.
New Yorkers deserve a fair economy. For the aforementioned reasons, we strongly oppose the amendments to S.795-A. Fair Deal NY continues to support and advocate for the passage of A.7138 (Weinstein), which comprehensively protects consumers and promotes a fair marketplace in NYS.
For more information, please contact Carolyn E. Coffey, at ccoffey@mfjlegal.org or Winston Berkman Breen at winston@protectborrowers.org.
June 6, 2024
BILL NO.: S.795-A
SPONSOR: Senator Comrie
TITLE OF BILL: An act to amend the general business law in relation to enacting the “consumer and small business protection act”
STATEMENT IN OPPOSITION: The Fair Deal NY coalition, which has long supported reforming New York’s consumer protection statute, OPPOSES amendments contained in S.795-A, which will NOT protect consumers and will dangerously roll back consumer protections for New Yorkers. Fair Deal NY is comprised of labor, faith, legal services, community-based, and consumer advocacy organizations that believe that a fair economy is the key to justice for all.
Fair Deal NY is fighting for the right for New Yorkers to live their lives without fear of exploitation. Quite simply, we seek to end abusive and unfair business practices in New York. New York’s consumer protection law, General Business Law § 349, which bans deceptive practices by all businesses, is now limited and outdated. Currently, 42 states and the federal government have more expansive prohibitions. Without a ban on unfair and abusive acts and practices, bad actors avoid the consequences of taking advantage of consumers as long as they do not get caught in a lie. As a result, honest companies that treat their customers fairly are at a competitive disadvantage. Likewise, consumers, especially low-income New Yorkers, communities of color, seniors, and immigrant populations are exploited. Updating New York’s weak statute will deter unscrupulous behavior and will help level the playing field for honest companies that treat their customers fairly. Consumers and small business owners who are tricked, defrauded, deceived, and bilked should be made whole, and then some.
The previous iteration of this bill, S.795, has bipartisan support from 30 Senators, and thoughtfully modernizes New York’s law. However, the amendments contained in S.795-A are dangerous and move us backwards. The bill is untenable for the following reasons:
● First and foremost, S.795A carves key industries, specifically banks, insurance companies, and investment advisors, brokers, and dealers, out of protections, and even curtails the Attorney General’s authority over these industries that engage in unfair and abusive conduct. The current law, which covers “all economic activity,” prohibits all industries from engaging in deceptive acts against New Yorkers. S.795-A therefore weakens the existing law.
● S.795-A removes an essential prong from the definition of “abusive.” This change would place New York law out of conformity with the prevailing standard contained in the Dodd-Frank Act. It also leaves New Yorkers vulnerable to abuse by businesses from which they did not purchase a good or service, for example, a student loan servicer on whom they reasonably relied to protect their interests.
● S.795-A fails to authorize class actions in state court, preventing an essential tool for people to band together to access justice in numbers.
● S.795-A removes tester standing, which originated from the Fair Housing Act and is a means of holding businesses accountable for violations before individuals are forced to suffer personal injury.
● Inexplicably, S.795-A extends the effective date, giving businesses twice as much time to engage in unfair and abusive practices, even though they presumably should have already been complying with this standard under federal law.
● Lastly, the bill imposes a notice requirement that will allow unscrupulous businesses to evade accountability and prevent people from pursuing their compelling claims in court.
We emphasize that carving out banks and insurance companies from the law affords those industries a windfall even though they are among the businesses most needing the accountability that the bill is intended to provide for regular people who are exploited. In fact, in a recent circular letter, the Consumer and Financial Protection Bureau underscored the need to regulate deceptive contracts in banking transactions, including those used in mortgage borrowing and general bank accounts. To carve out entire industries sets a dangerous precedent and leaves large swaths of consumers unprotected.
New Yorkers deserve a fair economy. For the aforementioned reasons, we strongly oppose the amendments to S.795-A. Fair Deal NY continues to support and advocate for the passage of A.7138 (Weinstein), which comprehensively protects consumers and promotes a fair marketplace in NYS.
For more information, please contact Carolyn E. Coffey, at ccoffey@mfjlegal.org or Winston Berkman Breen at winston@protectborrowers.org.
Legislators, Advocates Call for Long-Overdue Updates to New York’s Consumer Law
May 16, 2024, Albany--Legislators and consumer advocates held a press conference focused on passing the Consumer and Small Business Protection Act (CSPA) (S.795/A.7138) before the end of session.
The bill updates New York’s consumer protection law to bring it into line with the federal standard and the laws of the vast majority of other states’ standards.
Governor Hochul committed to updating New York’s consumer laws as the first pillar of her State of the State in January, saying: “If the last two years have been about putting more money in New Yorkers’ pockets, this year is about keeping it there and that starts with safeguarding people’s hard-earned cash.”
The need to ban “Unfair” and “Abusive” acts and practices
Currently New York state consumer law bans only “deceptive” but not “unfair” or “abusive” practices, meaning that it is a much weaker consumer protection statute than most states have.
The Governor advanced language to ban “unfair” and “abusive” practices in the SFY 2025 Executive Budget, which was accepted and strengthened in the Senate One-House Budget. Ultimately, these provisions were not included in the final agreement.
The Consumer Financial Protection Bureau's (CFPB) Office of Policy Planning and Strategy sent a letter to the governor about some critical issues in the debate, notably on the importance of banning unfair conduct, abusive conduct, and deceptive conduct, in all circumstances and regardless of whether the conduct targets individual consumers.The CFPB is a U.S. government agency dedicated to making sure consumers are treated fairly by banks, lenders and other financial institutions.
The directors of the Federal Trade Commission’s (FTC) Offices of Consumer Protection and Office of Policy Planning also sent a letter to the governor stressing the importance of protections against unfair conduct. The FTC is a U.S. government agency dedicated to protecting the public from deceptive or unfair business practices and from unfair methods of competition through law enforcement, advocacy, research, and education.
Advocates and legislators are pushing to pass the Consumer and Small Business Protection Act (S.795/A.7138), which will provide meaningful protections for New York consumers and small businesses. The bill is modeled on existing state and federal statutes with which businesses already must comply.
Assemblymember Helene Weinstein said: “I am proud to sponsor this critical piece of legislation to protect New York’s consumers and small businesses. New York’s consumer protection statute is in dire need of being modernized, and our bill would do just that. This bill would not only protect consumers, but it would level the playing field for businesses, by ensuring that honest businesses don’t suffer competitive disadvantage when competing against those who would take advantage of consumers.”
Senator Comrie said: “Unscrupulous businesses have wrought havoc on such vulnerable populations as our older adults, our young adults taking out student loans, our immigrants, and our small business owners for too long without New York taking action. With the prevalence and sophistication of such acts and practices only growing in recent years, stronger consumer protections are more important than ever. I am proud to stand up for New Yorkers as sponsor of the Consumer and Small Business Protection Act, as I believe it will properly disincentivize unfair and abusive business conduct and shield unsavvy consumers from bad actors. I want to thank Assembly Member Helene Weinstein, the Assembly sponsor, Senator Kevin Thomas, Chair of the Committee on Consumer Protection, and Attorney General Leticia James for their tremendous support as we work to move this legislation forward.”
Assemblyman Jeffrey Dinowitz said: "As we navigate the complexities of modern commerce and service, it becomes evident that our current business laws are antiquated, failing to shield consumers and small businesses from the onslaught of unfair, deceptive, and abusive practices. The Consumer and Small Business Protection Act is crucial to rectifying this imbalance. By broadening our prohibitions to include these harmful acts and empowering individuals with the ability to seek statutory damages, we not only deter deceitful entities but also ensure access to justice for those who have been wronged. This legislation modernizes our state's statutes and aligns us with the standards set by most other states. It's not just about updating figures on paper; it's about safeguarding the vulnerable, empowering the marginalized, and fostering a fair and just business environment for all New Yorkers."
Senator Kevin Thomas said: "The Consumer and Small Business Protection Act is a vital step towards aligning our state's current statutes with national standards meant to support consumers and small businesses from losing hard-earned money. As Chair of Consumer Protection Committee, working to end deceptive and abusive practices is always a top priority of mine. If enacted, it will create a fairer and more ethical marketplace for New York consumers, and I urge my colleagues to join us in supporting this legislation.”
Senator Sean Ryan said: "In New York, we like to think of our state as a progressive leader among our peers, but when it comes to consumer protection we lag behind the pack. Passing the Consumer & Small Business Protection Act would make smart and simple changes to discourage companies from partaking in predatory business practices, and it would provide long-overdue legal recourse to individuals and small businesses who have already been victimized. I'm proud to stand behind this bill, and I will keep working to protect New Yorkers across the state from shady business practices."
“New York’s current NY General Business Law Section 349 bans “deceptive” but not “unfair” or “abusive” practices, which makes us an outlier,” said Carolyn Coffey, Director of Litigation for Economic Justice, Mobilization for Justice. “In fact, New York is one of only eight states that lacks a privately unfairness ban; enacting CSPA will give New Yorkers the same rights that people have in neighboring states. In addition to only banning deceptive practices, New York’s consumer protection law is notoriously weak because courts have narrowed its applicability. Imposing a ‘public impact’ limitation that requires a pattern of bad acts to hold a business liable restricts New Yorkers from asserting their rights and obtaining redress. New York is one of only six states with this limitation—a limitation that was never intended by the Legislature. Without addressing the ‘public impact’ limitation, New York will still lag behind the rest of the country in terms of providing a useful tool to combat transactions that may only impact a single individual or business.”
“New York’s existing consumer protection law has not been updated in 44 years, said Winston Berkman-Breen, Legal Director at the Student Borrower Protection Center. “With its commonsense provisions, CSPA modernizes New York’s law and will make New York a leader in the area of consumer protection once again.
“Scammers target the most vulnerable among us, including and especially seniors,” said Kristen McManus, Associate State Director of Advocacy of AARP New York. “New Yorkers need tools at their disposal to fight back against these culprits, as well as the businesses that make it easy for con artists to swindle consumers. New York needs a consumer protection law that is broad and robust, and that can keep up with evolving scams.”
“As a legal services advocate, I see firsthand the way some businesses--including debt settlement companies, student loan servicers, and banks--exploit my clients and get away with it because New York’s law is so weak,” said Jordan Daniels, Student Loan Debt Manager, Education Debt Consumer Assistance Program, Empire Justice Center. “We need to deter financial exploitation and enable ordinary New Yorkers who are swindled to get their money returned.”
“CSPA is sensibly drafted and includes effective but reasonable deterrence by increasing the paltry existing penalty from $50 to $1000 and allowing punitive damages for the worst repeat offenders,” said Matthew Parham, Director of Litigation and Advocacy at Western NY Law Center. “The definitions are taken nearly verbatim from the Dodd Frank Act, and the meaning of ‘unfair’ is well settled from decades of case law; in fact businesses in New York are already subject to an unfairness standard under the Federal Trade Commission Act.”
“Ethical businesses that operate honestly have nothing to fear from this bill,” said Rose Marie Cantanno, Associate Director, Consumer Protection Unit, New York Legal Assistance Group. “The only businesses that will be impacted by CSPA are those that exploit New York's existing weak consumer protection law and take advantage of vulnerable New Yorkers to make extra profit. Complying with CSPA will merely require businesses to treat all New Yorkers in the marketplace fairly; for honest actors, this should not require any change in their modus operandi.”
“Strong consumer protection laws are an important tool in the fight for racial and economic justice,” said Diana Caba, Vice President for Community & Economic Development at Hispanic Federation. “Communities of color have been disproportionately targeted for predatory products and negatively impacted for decades because of systemic racism. CSPA is a measure the Legislature can take to prevent and redress the effects of past and ongoing racist and discriminatory business conduct.”
The Fair Deal New York Coalition and all of its partners and supporters call on the Legislature to pass CSPA promptly, and for Governor Hochul to fulfill her promise to safeguard New Yorkers and sign CSPA into law immediately.
BACKGROUND
Although in many ways New York has been a leader when it comes to protecting consumers, in one critical area it lags far behind the rest of the country: New York’s broadly applicable consumer protection law, N.Y. General Business Law § 349, is one of the weakest of its kind. New York bans deceptive acts, but in 43 other jurisdictions, it is also unlawful to treat consumers unfairly or abusively. Perversely, this creates a dynamic in which the more open a predatory company is about taking advantage of a New Yorker or small business, the less New York’s consumer protections apply to that company.
Examples of unfair, but not necessarily deceptive acts include:
• Student loan servicer steers borrowers to the most expensive repayment options.
• Nursing home shakes down relatives to pay patients’ bills.
• Debt collector manipulates seniors into giving up their limited, protected income.
• Auto dealer refuses to return a customer’s trade-in vehicle until a deal is finalized.
• Credit reporting agency recklessly exposes our personal information to theft.
• A landlord refuses to make repairs in order to push out its rent-stabilized tenants.
States and the federal government have used these unfair and deceptive acts and practices or “UDAP” laws for nearly a century. They have an intentionally broad scope meant to apply to whatever new challenges arise and pose a threat to consumers in the marketplace, without having to rush to the Legislature to pass new, hyper-specific protections. And broad is not the same as vague: decades of state and federal court decisions and government interpretations have defined the “unfairness” legal standard. Industry actors already know this, because all companies doing business in the U.S. are governed by the Federal Trade Commission’s ban against unfair business practices.
New York’s law has also been diluted by decades of court decisions that have narrowed the intended applicability of the law. Specifically, judges have required that to be actionable, deceptive conduct must harm consumers at large, not just one individual. There is no basis for this public impact limitation in the law itself. New York’s penalties also lag far behind the times: statutory damages are a mere $50, which is the cost of doing business for bad actors.
New York can take action to ensure its residents have meaningful consumer protections by modernizing New York law and bringing it into conformity with the rest of the country and with the national standard. This includes prohibiting unfair and abusive conduct, increasing penalties to function as a meaningful deterrent, and ensuring that all unlawful conduct is actionable, regardless of whether it harms one household or small business or the economy at large.
For more information, please contact Carolyn Coffey: 212.417.3701 ccoffey@mfjlegal.org.
Statement of Fair Deal NY Regarding the Importance of Improving New York’s Consumer Protection Law, Despite Objections by Special Interests
April 3, 2024--The Business Council of New York State and the National Federation of Independent Business (NFIB) doth protest too much in their recent opinion, “Deceptively Titled Legislation Will Skyrocket Costs for Consumers & Business.” Maybe that’s because it was written on behalf of their Big Business members and bursting with recycled, tired, and baseless claims. New York has a chance to catch its consumer protections up with the rest of the country—42 other states have some version of the protections being proposed in Albany right now—but special interest groups are working hard to kill these efforts, putting their clients’ profits over households’ and small businesses’ well-being.
Where to even start?
There’s the industry favorite that strong consumer protections in New York will “only lead to a needless spike in frivolous lawsuits.” If this sounds familiar, it’s because these same claims were made in 1980, when New York’s now-outdated consumer protections were first enacted. Then, like now, opponents foretold a flood of frivolous litigation that would break down the courthouse doors and result in “good guy” businesses shuttering or moving out of state. But that never happened. Nor have businesses in other states that already have these protections, such as our neighbors in Massachusetts and New Jersey, had their costs “skyrocket” as a result. The Business Council and NFIB are conveniently ignoring the decades of evidence from New York and elsewhere, and are choosing to fearmonger on their members’ behalf.
There are also the series of false statements that the authors assert. They claim that other states don’t mandate attorney fees to a prevailing plaintiff, nor do they allow class actions. First, attorneys’ fees, as is always the case under laws that provide for their recovery, are awarded only to prevailing parties after there has been a judicial determination that the law has been violated. Without fee shifting, low-income New Yorkers can never afford an attorney to enforce their rights. Maybe that’s the idea here. Second, many other states do mandate fees if a claimant is successful: Alabama, California, Colorado, Georgia, Iowa, Massachusetts, Maine, New Jersey, Nevada, and Oklahoma, to name just a few. The idea that states don’t also allow class actions is just as baseless. The authors simply don’t seem to have done their homework on this one. They also claim the abusive standard is subjective and does not require an injury. However, bans on abusive conduct have been adopted by other states and the federal government, and the text of New York’s proposed law explicitly requires an injury, rendering this argument patently false.
The suggestion that “the bill is being pushed by private plaintiffs’ attorneys and organizations who stand to see big paydays at the expense of New York consumers” is wishful thinking. The years-long campaign to bring New York law into parity with the rest of the country has been largely driven by the non-profit sector, including legal aid organizations, community groups, and consumer protection advocates that represent the interests of low-income New Yorkers. If there are moneyed interest groups that support these reforms, please identify yourselves! Any contributions to combat predatory actors in New York would be welcome.
Perplexingly, the Business Council and NFIB find the Senate’s proposed notice and opportunity to cure language “more egregious” than the version without these provisions, even though the notice requirement serves to safeguard “good guy” businesses by allowing them to correct any honest mistakes, and helps to limit lawsuits. If a reasonable settlement is made and rejected, the plaintiffs’ future recovery would be limited as a result. Indeed, advocates recognize this need for balance and support the notice to cure provisions advanced in the Senate One-House proposal.
Then there’s the hollow promise that “as a business community, we want to weed out bad actors.” If so, why resort to hit pieces like this, the only result of which will be to shield bad actors from meaningful accountability? As discussed above, “good guys” should have nothing to fear from strong protections with meaningful safeguards against abuse. Not to mention, many businesses are already required to abide by Federal Trade Commission and Consumer Financial Protection Bureau standards of “abusive” and “unfair”.
At the end of the day, the Business Council and NFIB demonstrate that they are not acting in good faith or representing the interests of struggling businesses across the state, for whom these proposed protections would be a much-needed lifeline. Instead of engaging in meaningful debate, they cough up a word salad of scare tactics intended to browbeat policymakers into submission. But maybe that’s what we should expect from Big Business.
For more information, please contact Carolyn Coffey: 212.417.3701 ccoffey@mfjlegal.org.
Give New Yorker's a Consumer Protection Law They Can Actually Use
Published in The New York Law Journal
March 28, 2024
Commentary: Ban on abusive business practices will shield small businesses
Published in The Times Union
March 26, 2024
Advocates seek ban on 'unfair" business practices in N.Y.
Published in The Times Union
March 10, 2024
Statement of Fair Deal NY Regarding the Consumer Protection Act in Governor Hochul’s FY 2025 Executive Budget
January 17, 2024--The Fair Deal NY coalition applauds Governor Hochul for delivering on her promise to modernize New York’s consumer protection law by proposing the Consumer Protection Act (CPA) in the FY 2025 Executive Budget. Banning unfair and abusive business conduct will put money back in the pockets of consumers and small businesses across the State who have been exploited by entities that take advantage of New York’s weak law, which has not been updated in over 40 years.
New York is one of only eight states that lacks a privately enforceable unfairness ban. We therefore welcome these much-needed reforms, including specifically prohibiting unfair and abusive practices and strengthening the ability of both the Attorney General and members of the public to seek redress. However, there are certain components of the CPA that should be strengthened and provisions that must be added to catch New York up to the rest of the country, put us back at the forefront of consumer protection nationwide, and fulfill Governor Hochul’s commitment to protecting New Yorkers.
As drafted, the budget bill does not accomplish all the needed reforms which are embodied in the Consumer and Small Business Protection Act sponsored by Senator Leroy Comrie and Assemblywoman Helene Weinstein (S.795/A.7138). Specifically, the budget bill does not:
• eliminate the court-imposed requirement that an aggrieved consumer show that a business’s bad acts affect the public at large. This “consumer-oriented” burden restricts access to justice and gives businesses a free pass.
• affirm that wronged small business owners may seek the protections of the CPA.
• include damages that will meaningfully deter bad actors from continuing to take advantage of customers.
• authorize class action lawsuits, as required by New York law. Class actions are critical for holding bad actors accountable and an important tool for effecting racial and economic justice in communities of color that have been subjected to widespread unfair and abusive practices for centuries, such as redlining.
• recognize standing for nonprofit organizations that test products and services on behalf of affected New Yorkers. Allowing these organizations to enforce the CPA could make New York a leader in consumer protection.
We also note that CPA’s requirement that, before going to court, harmed individuals give businesses an opportunity to correct their misconduct is well meaning, but common-sense exceptions must be added to ensure vulnerable consumers can avail themselves of the bill’s full protections.
These practical amendments will ensure that the Governor fulfills her ambitious and admirable goal of providing New Yorkers with meaningful consumer protections. We look forward to continuing to work with the Governor, the Attorney General, and the Legislature to enact an even more robust version of the Consumer Protection Act in the final budget.
For more information, please contact Carolyn Coffey: 212.417.3701 ccoffey@mfjlegal.org.
Statement of Fair Deal NY in Response to Governor Hochul’s Commitment to Strengthening Consumer Protections in her 2024 State of the State
January 10, 2024--The Fair Deal NY coalition applauds Governor Hochul for prioritizing consumer protection and committing to modernizing New York’s consumer protection law in her 2024 State of the State. New York’s consumer protection law has not been updated in over 40 years and New York is one of only eight states that lacks a privately enforceable unfairness ban. Strengthening New York’s consumer protection law by banning unfair and abusive business conduct will protect consumers and small businesses across the State and ensure that those who are exploited receive proper redress.
Examples of unfair but not deceptive conduct:
Ø Student loan servicer improperly denies a borrower request for affordable payment plans
Ø Nursing home improperly shakes down relatives to pay patients’ bills
Ø Debt collector manipulates seniors into giving up their limited, protected income
Ø Credit reporting agency recklessly exposes people’s personal information to theft
Ø Landlord refuses to make repairs to push out its rent-stabilized tenants
Ø Mortgage servicer fails to properly credit payments, landing a borrower in foreclosure
A ban on unfair and deceptive business practices sets a reasonable standard for business conduct that is already the norm under federal law and in over 40 other jurisdictions. Updating New York’s weak statute will deter unscrupulous behavior and will help level the playing field for honest companies that treat their customers fairly. Consumers and small business owners who are tricked, defrauded, deceived, and bilked should be made whole, and then some. We look forward to continuing to work with the Governor, the Attorney General, and the Legislature to ensure that consumers and small businesses in New York have the strong legal protections they deserve.
For more information, please contact Carolyn Coffey: 212.417.3701 ccoffey@mfjlegal.org.
NEWS RELEASE
NEW YORK COALITION APPLAUDS GOVERNOR HOCHUL FOR ANNOUNCING HER COMMITMENT TO ADVANCING CONSUMER RIGHTS IN NEW YORK
Updating New York’s Consumer Protection Statute Will Help Small Businesses and Consumers, Including Student Loan Borrowers, Patients, Car Owners, and Homeowners
January 3, 2024 — Fair Deal New York applauds Governor Kathy Hochul for demonstrating her commitment to consumers and small businesses yesterday by unveiling her “Consumer Protection and Affordability Agenda.” Among other announcements ringing in the new year, Governor Hochul expressed support for modernizing New York’s existing general consumer protection law.
She was joined by Attorney General Letitia James, who also announced her unequivocal and long-standing support for consumer protections and the need to update the existing statute. We also recognize Senator Leroy Comrie and Assembly member Helene Weinstein, who are championing similar legislation to update our consumer protection law.
“All states have some kind of ban against ‘unfair, deceptive, and abusive practices’ or ‘UDAPs,’” said Carolyn Carter, Deputy Director of the National Consumer Law Center. “New York’s existing law is outdated and weak--in fact, New York lags behind 43 jurisdictions with stronger UDAP laws that include privately enforceable prohibitions against unfair and abusive conduct. We are buoyed by the Governor’s announcement today and look forward to the enactment of these major and long-overdue improvements in protections for New Yorkers.”
“New York’s notoriously weak general business law leaves New York households and small businesses defenseless against unfair and despicable business conduct,” said Winston Berkman-Breen, legal director at the Student Borrower Protection Center. “At a time when millions of New Yorkers are struggling to repay student loans administered by predatory student loan servicers, a commitment to strengthening New York’s consumer protection shows that the government has these borrowers’ backs.”
“Governor Hochul recognizes that dishonest businesses should not be rewarded by a weak law that fails to hold them accountable,” explained Alex Dery Snider, director of policy and communications at Empire Justice. “In addition to banning unfair and abusive practices, New York should increase the current penalty to $1,000 and eliminate the court-imposed ‘consumer-oriented’ requirement, thus protecting small businesses in addition to consumers.”
“Bad actors who prey on older New Yorkers can only be held accountable with stronger consumer protections,” said AARP New York State Director Beth Finkel. “When it comes to New York’s deceptive business practices statute, we lag far behind. We stand with Governor Hochul as she works to ensure New York joins the dozens of other states that have raised the bar with more expansive protections. Now is the time for the state to provide vital protections to shield all consumers as well as honest businesses from unfair, unlawful and abusive business acts and practices.”
“Communities of color have historically been targeted for predatory practices and subjected to unfair and abusive conduct by businesses taking advantage of the dearth of fair and safe alternatives,” said Senior Staff Attorney Ariana Lindermayer at Mobilization for Justice. She continued, “A fair economy is key to justice for all.”
BACKGROUND
Although in many ways New York has been a leader when it comes to protecting consumers, in one critical area it lags far behind the rest of the country: New York’s broadly applicable consumer protection law, N.Y. General Business Law § 349, is one of the weakest of its kind. New York bans deceptive acts, but in 43 other jurisdictions, it is also unlawful to treat consumers unfairly or abusively. Perversely, this creates a dynamic in which the more open a predatory company is about taking advantage of a New Yorker or small business, the less New York’s consumer protections apply to that company.
Examples of unfair, but not necessarily deceptive acts include:
• Student loan servicer steers borrowers to the most expensive repayment options.
• Nursing home shakes down relatives to pay patients’ bills.
• Debt collector manipulates seniors into giving up their limited, protected income.
• Auto dealer refuses to return a customer’s trade-in vehicle until a deal is finalized.
• Credit reporting agency recklessly exposes our personal information to theft.
• A landlord refuses to make repairs in order to push out its rent-stabilized ten
States and the federal government have used these unfair and deceptive acts and practices or “UDAP” laws for nearly a century. They have an intentionally broad scope meant to apply to whatever new challenges arise and pose a threat to consumers in the marketplace, without having to rush to the Legislature to pass new, hyper-specific protections. And broad is not the same as vague: decades of state and federal court decisions and government interpretations have defined the “unfairness” legal standard. Industry actors already know this, because all companies doing business in the U.S. are governed by the Federal Trade Commission’s ban against unfair business practices. New York’s law has also been diluted by decades of court decisions that have narrowed the intended applicability of the law. Specifically, judges have required that to be actionable, deceptive conduct must harm consumers at large, not just one individual. There is no basis for this limitation in the law itself. New York’s penalties also lag far behind the times: statutory damages are a mere $50, which is the cost of doing business for bad actors. New York can take action to ensure its residents have meaningful consumer protections by modernizing New York law and bringing it into conformity with the rest of the country and with the national standard. This includes prohibiting unfair and abusive conduct, increasing penalties to function as a meaningful deterrent, and ensuring that all unlawful conduct is actionable, regardless of whether it harms one household or small business or the economy at large.
Hochul unveils proposal to eliminate insulin co-pays in New York
In a toned-down preview of her agenda for the year, the governor said she would aim to expand consumer protections.
JANUARY 2, 2024
Hochul wants to strengthen consumer protections in 2024
By Kate Lisa New York State
PUBLISHED 5:07 PM ET Jan. 02, 2024
Hochul seeks to eliminate copays on insulin
Governor delivers preview of her State of the State address that hints at more consumer protections for "everday New Yorkers"
By Joshua Solomon Jan 2, 2024
GOVERNOR HOCHUL UNVEILS FIRST PROPOSAL OF 2024 STATE OF THE STATE: THE CONSUMER PROTECTION & AFFORDABILITY AGENDA
By Hochul Press Office | January 2, 2024
Consumer-Protection Package Empowers Private Attorneys, AG To Fight Predatory Acts
An attorney for a New York consumer-protection advocacy coalition asked lawmakers to advance a fifth proposal, the Consumer and Small Business Protection Act, which didn't make it out of committee.
December 14, 2023 at 04:15 PM
Brian Lee
Litigation Reporter
Published in the New York Law Journal
New York Gov. Kathy Hochul signed four consumer protection measures that stand to place private attorneys, alongside the New York attorney general, in a central role in enforcement against alleged predatory activities, including pricegouging of meds and reporting medical debt to creditors.
Hochul’s inking of the new laws drew praise from Carolyn E. Coffey, an attorney for a New York coalition that fights for amplified consumer protection rights.
The bills, said Coffey, director of litigation for economic justice for Fair Deal NY, “all address specific business conduct that is deeply unfair and abusive. They are a critical first step toward enhancing consumer protection in New York State.”
On Wednesday, Hochul signed S.608C/A.5653B, adding medicine to the list of goods and services that can be classified as possibly being subject to price gouging. This bill prohibits the sale of medicine for “unconscionably excessive” pricing during a shortage, as declared by the U.S. Food and Drug Administration.
The bill provides the state, through the Office of the Attorney General, additional tools and authority to respond to alleged price-gouging of meds.
Hochul also signed S.4907A/A.6275A, prohibiting hospitals, health care professionals and ambulances from reporting medical debt to credit agencies.
And she signed S.5941B/A.3245D requiring companies to notify customers of automatic subscription renewals and to provide clear instructions for canceling subscriptions. It requires a business to notify a consumer of an upcoming automatic renewal or continuous service charge 15 to 30 days prior. The notice must include instruction on how to cancel the subscription.
Lastly, Hochul inked S.1048A/A.2672B, clarifying that merchants must post the highest price that a consumer might pay for a product, regardless of the payment method.
In a statement Wednesday, Hochul said: “As costs and inflation continue to creep up, consumer protection is one of the ways that our state is giving New Yorkers more purchasing power and keeping hard-earned money in their pockets. This legislation will help to protect individuals struggling with medical debt, unwanted subscriptions, and confusion over prices at the register. No one should have to jump through hoops to protect their finances and today we’re taking steps to help New Yorkers on their journeys toward financial freedom.”
But Coffey, the attorney for a New York coalition that fights for amplified consumer protection rights, asked lawmakers to advance a fifth proposal, the Consumer and Small Business Protection Act, which didn’t make it out of committee in both the Assembly and Senate earlier this year.
That bill, S795/A7138, aims to strengthen what bill advocates consider to be New York’s weak consumer protection law. It seeks to protect “consumers and small businesses against actions that are likely to cause substantial injury, take advantage of vulnerable consumers and small businesses, and defends them against practices that are likely to mislead under reasonable circumstances.”
Coffey, who represents clients in state and federal courts and engages legislative advocacy and has co-written several reports and amicus briefs on the debt-collection industry, said enacting the CSBPA would continue the momentum of stronger consumer protection rights in New York, while “modernizing and strengthening New York’s weak consumer protection law.”
Advocates of the bill say New York lags behind general business statutes in at least 39 other states.
Statement by Fair Deal NY in Support of Governor Hochul’s Signing of Four New Laws to Protect Consumers from Unfair Business Practices
New York, December, 13, 2023
The Fair Deal NY coalition applauds Governor Hochul for approving a package of legislation to protect New Yorkers from predatory subscription services, confusion over the price of goods and services, medicine price-gouging, and the devastating consequences of reporting of medical debt to credit reporting agencies. These bills all address specific business conduct that is deeply unfair and abusive. They are a critical first step toward enhancing consumer protection in New York State.
We urge Governor Hochul to continue this momentum by modernizing and strengthening New York’s weak consumer protection law through the Consumer and Small Business Protection Act (CSPA), S.795 (Comrie)/A.7138 (Weinstein). It is not enough to address consumer scams in a piecemeal manner. A strong ban on unfair and deceptive business practices sets a reasonable standard for all business conduct that would deter the kind of unscrupulous behavior addressed in these narrower bills, as well as novel, unforeseeable harms.
We will continue to work with the Governor, Attorney General, and Legislature to ensure passage of CSPA and further safeguard consumers.
Sen. Comrie & Sen. Thomas CSPA Webinar, watch: here
Senators Comrie and Thomas, Chairs of the Corporations and Consumer Protection Committees, respectively, would like to invite Senators and their staff to participate in an informational briefing on the Consumer and Small Business Protection Act (CSPA) (S.795/A.7138). There will be presenters and testimonies from impacted New Yorkers and a wide range of consumer advocates.
Presenters include: Mobilization for Justice -- Carolyn Coffey; Consumers Union --Chuck Bell; National Association for Consumer Advocates, Small Business Rep & 1-2 impacted clients.
Background: In 1970, New York led the charge by passing a statute providing consumers redress against deceptive business conduct. Other states followed suit, passing similar laws, many of which have been amended and strengthened over time. However, New York’s statute, GBL § 349, has not been updated in nearly 50 years and is now woefully outdated. Its scope has further been diminished by strained court interpretations over time. CSPA legislation will protect vulnerable New Yorkers, such as older adults, people with disabilities, and speakers of limited English proficiency, from exploitation.
Another Voice: Hidden clauses in everyday consumer contracts are unfair
Published in The Buffalo News
By David Carlucci
Commentary: New York needs a stronger consumer protection law
Published in The Times Union
By Leroy Comrie and Helene Weinstein
As lifelong New Yorkers, we are proud that our state ranks at the top of most lists. From our incredible racial and cultural diversity to our superior tourist destinations and our aggressive climate agenda, New York leads the charge in so many categories. As longtime public servants, we’re responsible for keeping New York on top. That’s why we’re fighting to fix a glaring omission in our state’s basic consumer protection law.
Although New York bans deceptive business practices, the state does not ban unfair business conduct. Such a prohibition would protect consumers from harmful conduct that does not necessarily involve an explicit lie. For example, a business should face consequences when it refuses to honor a cancellation policy, tricks a small-business employee into signing the wrong contract, or takes advantage of customers because they have a disability or limited language proficiency. Many assume that the victims of such shady deals would be entitled to get their money back – but without a strong consumer protection law, they have no recourse.
New York’s weak law is in stark contrast to the rest of the country. According to the National Consumer Law Center, 42 states ban both unfair and deceptive business conduct, which is also the norm at the federal level. In Arkansas, for example, someone who is treated unfairly would be entitled to equitable relief, restitution and a civil penalty of $10,000. But a Brooklynite who loses her lifelong home – along with the ability to build generational wealth – because of a deed theft scheme, or a Queens nail salon owner who faces financial ruin after being tricked into taking out a predatory loan, would not be entitled to relief under New York’s existing statute.
A system that allows unfair and deceptive practices to thrive also puts ethical businesses – many of which are small mom-and-pop shops – at a competitive disadvantage.
It’s time to provide New Yorkers with basic consumer protections. Our state can no longer be an outlier on an issue so common sense and yet so critically important to all of us in our everyday lives.
That’s why we are sponsoring the Consumer and Small Business Protection Act (CSPA) (S.795/A.7138), which would make New York a model of strong consumer protections. Rather than build up consumer safeguards using a piecemeal and industry-specific approach that cannot nimbly address evolving scams, CSPA would ban all unfair practices, as most states have already done. The bill would define and clarify unfair, deceptive and abusive practices. CSPA calls for raising the current penalty for violating the law from $50 to $1,000, providing clearer standards, and improving access to recourse by mandating legal fees in the remedy of the suit.
New Yorkers deserve a fair and just economy that protects consumers, rewards good businesses and holds bad actors accountable. The Legislature should enact the Consumer and Small Business Protection Act and make New York Number One when it comes to protections for consumers and small businesses.
State Sen. Leroy Comrie of Queens represents the 14th Senate District. Assemblywoman Helene Weinstein of Brooklyn represents the 41st Assembly District.
NYS consumer protection bill provides needed safeguards
When Democrats captured the New York legislature in the 2018 election, prognosticators predicted that New York would quickly pass progressive laws. Yet more than three years later, New Yorkers still lack the consumer protections of red and purple states like Arkansas, Georgia, North Carolina, and West Virginia.
Unlike most other states, New York does not ban unfair business practices—the same ban that empowered the Sandy Hook plaintiffs to hold accountable the manufacturer of the gun that killed their children. Imagine not having that recourse if such a tragedy occurred in New York.
Or consider the more common case of Tennessee resident Mark Wolfe, unfairly turned down for a job because a bank had carelessly given an identity thief a credit card in Wolfe’s name. The identity thief ran up bills and didn’t pay them, damaging Wolfe’s credit record. Wolfe was able to sue the bank under a Tennessee law barring unfair conduct. If the same thing happens to a New Yorker, the New Yorker would be out of luck.
Claims based on unfairness—and its cousin, abusiveness--have protected millions of Americans when they had no other options. When Wells Fargo opened millions of unauthorized accounts, the federal Consumer Financial Protection Bureau based its claim on its unfairness and abusiveness powers. In other states, unfairness laws also protect consumers against predatory lending, price-gouging, and a wide variety of other problems. But New York’s consumer protection law lacks such prohibitions.
Now that could change. The proposed Consumer and Small Business Protection Act would give New Yorkers protections enjoyed by other states’ consumers. Long Island legislators from both parties, including State Sen. Kevin Thomas and Assembly members Steve Englebright, Michael Montesano, Joe DeStefano and Michaelle Solages, are among the bill’s supporters.
Unsurprisingly, the business lobby has mobilized against the bill. The American Property Casualty Insurance Association has warned that the bill would produce an “explosion of litigation.” Similarly, the Business Council says the bill would lead to “a needless spike in the number of meritless lawsuits.”
Those objections would be worrisome—except that the business lobby made similar arguments in 1980 when New York gave consumers the right to sue for deceptive acts, and those arguments proved baseless. Back then, the New York State Bankers Association claimed that the law would “all but guarantee a rash of spurious suits.” That prediction has itself turned out to be, well, spurious. But while there has been an explosion of litigation since New York enacted the 1980 law, it’s not of consumers suing businesses. Rather, it’s of businesses suing consumers—which now represent about a quarter of all cases nationwide.
Businesses also object that the bill would raise the amount consumers can recover from $50 to $1,000. But as the distinguished jurist Richard Posner once wrote, only a “lunatic or a fanatic” sues for amounts like $50. The amount consumers recover needs to be enough to make it worth their while to go through the unpleasantness of a lawsuit and also to deter bad actors from misconduct. Even so, $1,000 compares quite favorably to the amount consumers can recover in the red state of Kansas: $10,000, or 200 times what New York law currently provides.
Businesses in other states have thrived in fair marketplaces that protects consumers. So will New York businesses. It’s past time that New York legislators give their constituents the same protections against overreaching that consumers in other states have.
This guest essay reflects the views of Jeff Sovern, a professor of law at St. John's University in Queens.