New York State Enacts Historic Consumer Protection Bill – Expands Scope of GBL 349

As previously covered here and here, in March 2025 the Office of the Attorney General for the State of New York introduced the Fostering Affordability and Integrity Through Reasonable (“FAIR”) Business Practices Act in the State Senate and State Assembly.  The proposed legislation is intended to revise Article 22-A of New York’s General Business Law.

The FAIR Business Practices Act passed the State Legislature in June 2025.

On December 20, 2025, New York Governor Kathy Hochul officially announced the signing of the historic consumer protection law.  The legislation expands and strengthens New York’s primary consumer protection law, GBL §349, for the first time in 45 years.  The new law now protects New Yorkers from unfair, abusive, and deceptive business practices.

“The FAIR Business Practices Act will help us tackle rising costs and protect working families and small businesses,” said Attorney General James.  “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.  At a time when the federal government is abandoning working people and raising the cost of living, 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.”

“I commend the Governor and Attorney General James for advancing the FAIR Business Practices Act, a critical statutory modernization of the state’s business climate, and ensuring fairness endures throughout the 21st century,” said Senator Leroy Comrie.  “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.  This legislation codifies case law that maintains transactional safety and provides the enforcement tools to hold bad actors accountable so we may all strive towards a good faith business climate.  I look forward to continuing our work with Attorney General James, our economic development partners, and businesses of all sizes to ensure that New York remains a place where markets, lending, and all other transactions remain fair.”

“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,” said Assemblymember Micah Lasher.  “For too long, our state has had one of the weakest consumer protection laws in the country – and that ends today.  Now, Attorney General James will have far stronger legal tools to go after the unfair and abusive practices that drain billions from hardworking New Yorkers every single year.  Consumer protection is affordability, plain and simple.  When we stop companies from cheating people, families keep more of what they earn and can spend it on what they actually need. I am deeply grateful to Governor Hochul for her leadership, to Attorney General James for her tireless advocacy, and to Senator Comrie for his partnership in this fight.”

The legislation is intended to stop a range of unscrupulous business practices that cost New Yorkers more money, such as lenders, including auto lenders, mortgage servicers, and student loan servicers, that deceptively steer borrowers into higher cost loans.  The new law is also designed to reduce unnecessary and hidden fees, stop unfair billing practices by health care companies, and prevent companies from taking advantage of New Yorkers with limited English proficiency.

New York’s current consumer protection law, GBL §349, was passed in 1970 and, unlike 41 other states’ laws, only prohibited deceptive business acts and practices, leaving New Yorkers vulnerable to a broad array of exploitative acts by companies, according to the OAG announcement.  The FAIR Business Practices Act will bring New York in line with the vast majority of other states by protecting New Yorkers from unfair and abusive business acts, such as:

• Student loan servicers that steer borrowers into the most expensive repayment plans;
• Car dealers that refuse to return a customer’s photo ID until a deal is finalized and charge for add-on warranties that the customer did not actually purchase;
• Nursing homes that routinely sue relatives of deceased residents for their unpaid bills despite not having any basis for liability;
• Companies that take advantage of consumers with limited English proficiency and obscure pricing information and fees;
• Debt collectors that collect and refuse to return a senior’s Social Security benefits, even though those benefits are exempt from debt collection; and
• Health insurance companies that present customers with long lists of in-network doctors who, in reality, do not accept the insurance.

Section 349 of New York’s General Business Law has long prohibited “deceptive” acts or practices.   Now, the law has been expanded to prohibit “unfair, deceptive, or abusive” acts or practices.

Under the new law, an “unfair” act or practice “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.”

An act or practice is “abusive” under the new law when it either “materially interferes with the ability of a person to understand a term or condition of a product or service” or takes “unreasonable advantage” of: (i) a lack of understanding on the part of a person of the material risks, costs, or conditions of a product or service; (ii) the inability of a person to protect such person’s interests in selecting or using a product or service; or (iii) the reasonable reliance by a person on a person engaging in the act or practice to act in the relying person’s interests.

With the federal government rolling back protections for consumers and small businesses, the FAIR Business Practices Act authorizes the Office of the Attorney General (OAG) to protect vulnerable New Yorkers from exploitative practices.

The legislation provides the New York Attorney General and private plaintiffs the ability to seek enhanced civil penalties and restitution in amounts significantly more than available statutory damages pursuant to New York General Business Law Section 349.  The FAIR Act significantly increases statutory damages available under GBL §349 from $50 to $1,000, and permits recovery of actual and punitive damages.

Penalties for unfair, deceptive or abusive practices could potentially include penalties of up to $5,000, per violation.  Knowing or willful violations could result in penalties totaling the greater of $15,000 or three times the amount of restitution, per violation.  Prevailing plaintiffs in private actions would also be permitted to recover attorneys’ fees and costs.

The NY AG and private plaintiffs (individuals, small businesses and non-profits) are now entitled to enforce even a single instance of unfair, deceptive and abusive acts and practices, including, but not limited to, false advertising.  Moreover, the law’s prohibitions apply regardless of whether the act or practice is “”consumer-oriented,” possesses a “public impact,” or is part of a “pattern of conduct” – judicially imposed limitations that have previously existed pursuant to GBL §349.

Affirmative defenses to the Fair Business Practices Act could potentially include, without limitation, a private plaintiff meeting minimum threshold standing requirements, the alleged harm being capable of remedy via federal securities or intellectual property laws, and/or the alleged harm arising during the course of a high-value experienced commercial transaction and directed to the involved parties only.

The FAIR Business Practices Act would not permit compliance with federal rules to be a complete defense.  Rather, the Act creates a narrowed affirmative defense available provided that the act or practice is required or specifically authorized by the rules and regulations of, and the statutes administered by, the Federal Trade Commission or other federal agencies.

Consult an attorney general subpoena lawyer for more information on the contours of the FAIR Act, or if your company is the subject of an attorney general investigation.

Takeaway: New York’s existing consumer protection law is primarily governed by GBL §349 which focuses primarily on “deceptive” acts and practices.  GBL §349 has long been believed by New York state regulatory authorities to be insufficient to adequately protect New Yorkers from technological advances and unfair practices associated therewith.  With the passage of the FAIR Act, businesses operating in New York should consult with an experienced Attorney General defense lawyer to ensure compliance with applicable New York State business and advertising legal regulatory requirements, or in the event of an investigation or other legal action.

Richard B. Newman is a leading FTC CID lawyer  at Hinch Newman LLP.  Follow FTC defense lawyer on National Law Review.

Informational purposes only. Not legal advice. This article is not intended and should not be construed as legal advice. May be considered attorney advertising.