A 5287: Enacts the "Consumer and Small business Protection Act"; relates to standing for persons affected by prohibited or unlawful business practices; expands prohibited acts to include unfair, deceptive or abusive acts.

  
  STATE OF NEW YORK ________________________________________________________________________ 5287 2025-2026 Regular Sessions  IN ASSEMBLY February 12, 2025 ___________ Introduced by M. of A. LASHER -- read once and referred to the Committee on Consumer Affairs and Protection AN ACT to amend the general business law, in relation to enacting the "Consumer and Small business Protection Act" The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. This act shall be known and may be cited as the "Consumer 2 and Small business Protection Act (CSPA)". 3 § 2. Legislative findings and intent. The Legislature declares that 4 the State has a responsibility to protect individuals and businesses 5 within the State from unfair and abusive business acts and practices. 6 The Legislature further declares that the State's law, which guarded 7 only against deceptive business acts and practices, has been insuffi- 8 cient to meet this responsibility and has become out of date as other 9 states' laws provide far greater protections. Consumers and small busi- 10 nesses have long been vulnerable to unscrupulous business practices that 11 are unfair and abusive without being expressly deceptive. The State must 12 not allow bad actors to peddle predatory products and services as long 13 as they are clever enough not to get caught in a lie. To that end, and 14 to better level the playing field for the State's many honest busi- 15 nesses, this legislation defines unfair and abusive acts and practices 16 expansively. 17 The State must also ensure that this protection covers small busi- 18 nesses, which are frequent targets of predatory loans and other forms of 19 exploitation, along with all consumer transactions. This legislation 20 therefore rejects the limitation, imposed by courts, that prohibited 21 conduct be "consumer oriented," have an impact on the public at large, 22 or be part of a broader pattern. Consumers and small businesses are 23 entitled to redress whenever they are harmed by deceptive, unfair, or 24 abusive conduct. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00161-01-5 
 A. 5287 2 1 Finally, for any of these protections to be meaningful, the State must 2 ensure that the remedies for prohibited conduct provide an effective 3 deterrent. This legislation therefore updates the statutory damages for 4 violations for the first time in decades, from $50 to $1,000, and allows 5 meaningful punitive damages for particularly egregious behavior. The 6 Legislature recognizes that unfair, deceptive, and abusive practices 7 have a particular impact on poor individuals, people of color, and those 8 affected by natural disasters and health emergencies, including the 9 COVID-19 pandemic. For this reason, the State must ensure that limited 10 resources not prevent individuals and small businesses from seeking 11 remedies. This legislation therefore opens access to justice by making 12 recovery of attorney's fees mandatory for a prevailing plaintiff and 13 authorizing class actions. 14 § 3. Section 349 of the general business law, as added by chapter 43 15 of the laws of 1970, subdivision (h) as amended by chapter 157 of the 16 laws of 1984, and subdivision (j) as added by section 6 of part HH of 17 chapter 55 of the laws of 2014, is amended to read as follows: 18 § 349. [Deceptive acts] Prohibited acts and practices unlawful. (a) 19 [Deceptive] This section prohibits any unfair, deceptive or abusive acts 20 or practices in the conduct of any business, trade or commerce or in the 21 furnishing of any service [in this state are hereby declared unlawful]. 22 (1) For the purposes of this section, an act or practice is unfair 23 when it causes or is likely to cause substantial injury, the injury is 24 not reasonably avoidable, and the injury is not outweighed by counter- 25 vailing benefits. 26 (2) For the purposes of this section, an act or practice is deceptive 27 when the act or practice misleads or is likely to mislead a person and 28 the person's interpretation is reasonable under the circumstances. 29 (3) For the purposes of this section, an act or practice is abusive 30 when: 31 (i) it materially interferes with the ability of a person to under- 32 stand a term or condition of a product or service; or 33 (ii) it takes unreasonable advantage of: 34 (A) a person's lack of understanding of the material risks, costs, or 35 conditions of the product or service; 36 (B) a person's inability to protect such person's interests in select- 37 ing or using a product or service; or 38 (C) a person's reasonable reliance on a person covered by this section 39 to act in such person's interests. 40 (b) Whenever the attorney general shall believe from evidence satis- 41 factory to [him] such attorney general that any person, firm, corpo- 42 ration or association or agent or employee thereof has engaged in or is 43 about to engage in any of the acts or practices stated to be unfair, 44 unlawful [he], deceptive or abusive, such attorney general may bring an 45 action in the name and on behalf of the people of the state of New York 46 to enjoin such unlawful acts or practices and to obtain restitution of 47 any moneys or property obtained directly or indirectly by any such 48 unlawful acts or practices. In such action preliminary relief may be 49 granted under article sixty-three of the civil practice law and rules. 50 Such actions may be brought regardless of whether or not the underlying 51 violation is directed at individuals or businesses, is consumer-orient- 52 ed, or involves the offering of goods, services, or property for 53 personal, family or household purposes. 54 (c) Before any violation of this section is sought to be enjoined, the 55 attorney general shall be required to give the person against whom such 56 proceeding is contemplated notice by certified mail and an opportunity 
 A. 5287 3 1 to show in writing within five business days after receipt of notice why 2 proceedings should not be instituted against [him] such person, unless 3 the attorney general shall find, in any case in which [he] such attorney 4 general seeks preliminary relief, that to give such notice and opportu- 5 nity is not in the public interest. 6 (d) In any such action it shall be a complete defense that the act or 7 practice is, or if in interstate commerce would be, subject to and 8 complies with the rules and regulations of, and the statutes adminis- 9 tered by, the federal trade commission or any official department, divi- 10 sion, commission or agency of the United States as such rules, regu- 11 lations or statutes are interpreted by the federal trade commission or 12 such department, division, commission or agency or the federal courts. 13 (e) Nothing in this section shall apply to any television or radio 14 broadcasting station or to any publisher or printer of a newspaper, 15 magazine or other form of printed advertising, who broadcasts, 16 publishes, or prints the advertisement. 17 (f) In connection with any proposed proceeding under this section, the 18 attorney general is authorized to take proof and make a determination of 19 the relevant facts, and to issue subpoenas in accordance with the civil 20 practice law and rules. 21 (g) This section shall apply to all [deceptive] prohibited acts [or] 22 and practices [declared to be unlawful], whether or not subject to any 23 other law of this state, and shall not supersede, amend or repeal any 24 other law of this state under which the attorney general is authorized 25 to take any action or conduct any inquiry. 26 (h) (1) In addition to the right of action granted to the attorney 27 general pursuant to this section, any person who has been injured by 28 reason of any violation of this section may bring an action in [his] 29 such person's own name to enjoin such unlawful act or practice, an 30 action to recover [his actual damages or fifty dollars, whichever is 31 greater, or both such actions] one thousand dollars and such person's 32 actual damages, if any, or both such actions. Such actions may be 33 brought regardless of whether or not the underlying violation is consum- 34 er-oriented, has a public impact or involves the offering of goods, 35 services or property for personal, family or household purposes. The 36 court may, in its discretion, increase the award of damages [to an 37 amount not to exceed three times the actual damages up to one thousand 38 dollars,] if the court finds the defendant willfully or knowingly 39 violated this section. The court [may] shall award reasonable attorney's 40 fees and costs to a prevailing plaintiff. 41 [(j)] (i) For purposes of this section, a "person" is defined as an 42 individual, firm, corporation, partnership, cooperative, association, 43 coalition or any other organization's legal entity, or group of individ- 44 uals however organized; 45 (ii) For purposes of this section "non-profit organization" is defined 46 as an organization that is (A) not an individual; and (B) is neither 47 organized nor operating in whole, or in significant part, for profit; 48 (iii) Given the remedial nature of this section, standing to bring an 49 action under this section, including but not limited to organizational 50 standing and third-party standing, shall be liberally construed and 51 shall be available to the fullest extent otherwise permitted by law. 52 (2) Any individual or non-profit organization entitled to bring an 53 action under this article may, if the prohibited act or practice has 54 caused damage to others similarly situated, bring an action on behalf of 55 such individual or non-profit organization and such others to recover 56 actual, statutory and/or punitive damages or obtain other relief as 
 A. 5287 4 1 provided for in this article. Statutory damages under this section will 2 be limited to (i) such amount for each named plaintiff as could be 3 recovered under paragraph one of this subdivision; and (ii) such amount 4 as the court may allow for all other class members without regard to a 5 minimum individual recovery, not to exceed the lesser of one million 6 dollars or two per centum of the net worth of the business. Thus, any 7 action brought under this subdivision shall comply with article nine of 8 the civil practice law and rules. 9 (3) A non-profit organization may bring an action under this section, 10 on behalf of itself or any of its members, or on behalf of those members 11 of the general public who have been injured by reason of any violation 12 of this section, including a violation involving goods or services that 13 the non-profit organization purchased or received in order to test or 14 evaluate qualities pertaining to use for personal, household, or family 15 purposes. A non-profit organization may seek the same remedies and 16 damages that a person may seek under paragraph one of this subdivision. 17 (4) Before any violation of this section is sought to be enjoined, the 18 person bringing the action shall be required to give the person against 19 whom such action is contemplated notice by certified mail, to the place 20 where the transaction occurred or to the principal place of business 21 within the state of the person against whom such action is contemplated, 22 and an opportunity to show in writing within ten business days after 23 mailing of notice why proceedings should not be instituted against such 24 person, unless, in any case in which the person seeks preliminary 25 relief, the giving of such notice and opportunity would cause immediate 26 and irreparable injury, loss or damages. 27 (i) Notwithstanding any law to the contrary, all monies recovered or 28 obtained under this article by a state agency or state official or 29 employee acting in their official capacity shall be subject to subdivi- 30 sion eleven of section four of the state finance law. 31 (j) This section is intended to expand and not take away existing 32 consumer rights. 33 § 4. This act shall take effect on the sixtieth day after it shall 34 have become a law.