New York's FAIR Business Practices Act: What The New Consumer Protection Measure Means For Your Business

In 2025, New York enacted one of the most consequential updates to its consumer protection framework in decades. The Fostering Affordability and Integrity through Reasonable Business Practices Act (FAIR Act) significantly expands the scope and strength of New York's long-standing consumer protection statute, General Business Law § 349, and alters the compliance landscape for New York businesses.

While Section 349 prohibited "deceptive acts or practices," it notably lacked explicit bans on unfair or abusive conduct. The FAIR Act closes that gap, aligning New York more closely with modern consumer protection regulations. This article addresses the changes under the FAIR Act, why they matter, and what businesses need to do going forward.

Prohibition of Unfair and Abusive Acts/Practices

New York's consumer protection law now covers unfair, deceptive, and abusive acts and practices, not just deceptive ones. This expansion brings the law more in line with the federal Consumer Financial Protection Act (CFPA), which also prohibits unfair, deceptive, or abusive acts and practices. The terms are defined as follows:

• Unfair: An act or practice is considered unfair when it causes or is likely to cause substantial injury to a person, the injury is not reasonably avoidable by such person, and the injury is not outweighed by countervailing benefits to consumers or competition.
• Deceptive: An act or practice is deceptive when the act or practice misleads or is likely to mislead a person and the person's interpretation of the act or practice is reasonable under the circumstances.
• Abusive: An act or practice 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 person's lack of understanding of the material risks, costs, or conditions of the product or service; (B) a person's inability to protect such person's interests in selecting or using a product or service; or (C) a person's reasonable reliance on a person covered by this section to act in such person's interests.

Broader Scope of Protections

While Section 349 traditionally focused on consumer-oriented conduct, the amended statute clarifies that the Attorney General may bring actions to protect not only individual consumers, but also small businesses and nonprofit organizations harmed by unfair or abusive practices. Pursuant to the FAIR Act, "[a]n 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."

Expanded Enforcement Authority

The FAIR Act significantly strengthens the legal remedies available to both the Attorney General's office and private individuals and small businesses. To start, the new law significantly increases the statutory damages for violations of Section §349 from $50 to $1,000. In addition to statutory damages, the law allows for the recovery of actual and punitive damages, as well as the recovery of attorney's fees and costs by prevailing plaintiffs in private actions.

The FAIR Act also includes significant civil penalties for violations. Businesses found to have engaged in unfair, deceptive, or abusive practices can incur penalties of up to $5,000 per violation. For violations that are deemed knowing or willful, the penalties are enhanced, set at the greater of $15,000 or three times the amount of restitution for each violation.

States like New York are picking up some of the important enforcement work that the currently encaptured Consumer Finance Enforcement Bureau is walking away from. The fear is that without greater state involvement, the ongoing curtailment of the CFPB's watchdog role will have a negative impact on minority communities that are presently at greater risk of financial predation.

Compliance Implications for Businesses

For businesses operating in New York, the FAIR Act raises the stakes for compliance. Traditional disclosure-based compliance strategies may no longer be sufficient. A practice that is fully disclosed can still be challenged if it is deemed unfair or abusive in substance. Accordingly, companies should reassess:

• Pricing structures and fee disclosures;
• Contract terms with consumers and small businesses;
• Marketing and sales practices;
• Subscription and cancellation processes; and
• Internal policies governing customer interactions.

Risk assessments should focus not only on whether practices are misleading, but also on whether they could be viewed as exploitative, coercive, or unduly harmful.

Key Takeaway

The FAIR Act represents a fundamental shift in New York consumer protection law. By expanding Section 349 to cover unfair and abusive practices, broadening who is protected, and enhancing enforcement tools, the Legislature has transformed a narrow statute into a powerful regulatory tool.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.