As federal consumer protection enforcement has recently taken a sharp turn towards less regulation and enforcement, states continue efforts to fill the gap left by the federal pullback. On June 18, the New York legislature took a significant step in expanding the scope of New York's consumer protection laws, passing the Fostering Affordability and Integrity through Reasonable Business Practices Act ("FAIR Business Practices Act" or "the Act").1 The Act marks the first update to New York's consumer protection law in 45 years and tracks recent trends in state-based AG consumer protection enforcement, which include a significant shift in focus from federal to state enforcement. If signed by Governor Kathy Hochul, the Act would expand liability under New York General Business Law § 349 ("GBL § 349") beyond "deceptive" acts to include both "unfair" and "abusive" practices. It would also expand the categories of commercial activity to which the law applies. These changes would significantly bolster the New York Attorney General's consumer protection enforcement powers, potentially increase the volume of consumer protection litigation, and align New York's statute more closely with those of other states that prohibit abusive and unfair acts in addition to deceptive acts. Important updates to GBL § 349 and the potential impacts of the Act are discussed in greater detail below.
Key Changes to GBL § 349
1. Prohibiting abusive and unfair acts and practices.
Currently, GBL § 349, New York's primary consumer protection statute, only applies to "deceptive" business practices.2 If signed into law, the Act would add "abusive" and "unfair" business practices to GBL § 349. Additionally, the Act states that the New York Attorney General's consumer protection responsibility "extends to protecting businesses and non-profits as well as individuals," which is reflected in the Act's definitions of "unfair" and "abusive" practices.3
The Act's definition of "unfair," which is based on the Federal Trade Commission Act's definition,4 provides that a practice is unfair when it "causes or is likely to cause substantial injury which is not reasonably avoidable and is not outweighed by countervailing benefits to consumers or to competition."5 As written, the Act applies to harms against businesses, in addition to consumers, and therefore may cover a broader scope of unfair practices than what is covered by the FTC definition.
Similarly, the Act's definition of "abusive" practices is based on a federal statute—the Consumer Financial Protection Act's definition6—but expands the scope. Under the FAIR Business Practices Act, an act is "abusive" when it "materially interferes with the ability of a person to understand a term or condition of a product or service" or it "takes unreasonable advantage of (a) a lack of understanding on the part of a person of the material risks, costs, or conditions of a product or service; (b) the inability of a person to protect such person's interests in selecting or using a product or service; or (c) the reasonable reliance by a person on a person engaging in the act or practice to act in the relying person's interests."7 The Attorney General's press release related to the bill sheds more light with examples of abusive practices including, among others: making it "difficult for consumers to cancel a subscription"; health insurance companies using "long lists of in-network doctors who turn out not to accept the insurance"; and student loan servicers that "steer borrowers into the most expensive repayment plans." Thus, the Act expands the CFPA's definition in two ways: First, the protections under the New York bill apply beyond consumer financial products or services, and second, the prohibitions apply to all "persons," not just consumers.
Importantly, the prohibition on unfair or abusive acts and practices is enforceable only by the Attorney General. The Act does not amend the private right of action for any person injured by deceptive acts or practices under the current GBL § 349.
2. Eliminating the "consumer-oriented" doctrine in Attorney General enforcement
Historically, courts have interpreted New York's current law banning deceptive business practices to apply only to "consumer-oriented" practices that have "a broader impact on consumers at large" rather than "private contract disputes, unique to the parties."8 The FAIR Business Practices Act abolishes this "consumer-oriented" judicial doctrine in Attorney General enforcement, with explicit statutory language that an "act or practice made unlawful by this section is actionable by the attorney general regardless of whether or not that act or practice is consumer-oriented."9
In what may be even more significant expansion of authority, the removal of the "consumer-oriented" doctrine would mark a significant expansion of the kinds of practices that may now be actionable by the Attorney General, and it would make New York one of a few states with a statute this broad (alongside, for example, California and Washington). That change, if enacted, will empower the New York Attorney General to enforce the law against businesses that may be engaged in deceptive, unfair, or abusive practices in the context of private transactions that nonetheless have significant public consequences. This may result in the Attorney General bringing claims that do not fit within traditional antitrust frameworks where there is direct harm to businesses, but not to consumers. For example, antitrust claims under a "refusal to deal" theory are typically rejected at the pleading stage. It is possible that the Attorney General could claim that such practices are nevertheless unfair and thus actionable under FAIR.
Expected Effects if Signed into Law
If signed by Governor Hochul, the FAIR Business Practices Act will empower the New York Attorney General to take action to protect consumers against a broader range of business practices. In a press release lauding the passage of the Act, New York Attorney General Letitia James identified examples of unfair and abusive acts that the Act is intended to address, such as:
- Mortgage servicers charging unnecessary high fees;
- Debt collectors stealing Social Security benefits;
- Health insurance companies using unfair billing practices;
- Student loan servicers steering borrowers into the most expensive repayment plans; and
- Companies taking advantage of consumers with limited English proficiency and obscure pricing information and fees.10
The expansion of New York's GBL § 349 is representative of the ongoing efforts by some state attorneys general to broaden their consumer protection powers and jurisdiction, especially in response to less aggressive enforcement at the federal level. We will continue to monitor the progress of this legislation and provide broader state AG and consumer protection client alerts and analysis.
Footnotes
1. Attorney General James Applauds Passage of Legislation to Protect Consumers and Small Businesses (June 18, 2025).
2. N.Y. Gen. Bus. Law § 349(a) ("Deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful.")
3. Fostering Affordability and Integrity through Reasonable Business Practices Act § 348, https://legislation.nysenate.gov/pdf/bills/2025/S8416.
4. See 15 U.S.C. § 45(n).
5. Fostering Affordability and Integrity through Reasonable Business Practices Act § 349(a)(1), https://legislation.nysenate.gov/pdf/bills/2025/S8416.
6. See 12 U.S.C. § 5531(d).
7. Fostering Affordability and Integrity through Reasonable Business Practices Act § 349(a)(2), https://legislation.nysenate.gov/pdf/bills/2025/S8416.
8. Oswego Laborers' Loc. 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20, 25 (1995).
9. Id.
10. Attorney General James Applauds Passage of Legislation to Protect Consumers and Small Businesses (June 18, 2025).
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