AG James: NY seeks more consumer protection after Trump seeks to 'dismantle' fed office
Attorney General Letitia James said New York "cannot rely on the federal consumer protection laws." Credit: Sipa USA via AP/Anthony Behar
ALBANY — State Attorney General Letitia James on Thursday backed a legislative proposal that she said is needed to better protect New Yorkers from scams by deceptive auto salespersons, abusive debt collectors, disreputable lenders and other deceptive business operators after action by the Trump administration made consumers more vulnerable.
The bill is named Fostering Affordability and Integrity through Reasonable Business Practices, or the FAIR Act. It is intended to strengthen state consumer protection law and enforcement to combat unfair business practices that can confuse and deceive consumers. James said the scams often target New Yorkers for whom English is the second language and other vulnerable consumers.
The measure would address cases involving mortgages and property deeds; artificial intelligence schemes; the illegal internet crime known as phishing; hard-to-cancel subscription for goods and services; nursing homes suing relatives of residents; identity theft and other deceptive and abusive crimes, James said.
She said the measure will have a "cure provision" that will allow businesses to correct their actions and avoid civil action by her office. The proposal would expand current state law that targets "deceptive business acts and practices" to include "a broad range of unfair, deceptive and abusive business practices."
Violators of the proposed measure would face a civil penalty of up to $1,000 plus damages and costs of the victim. If a court finds the operator "willfully or knowingly violated" the law, the award could rise to triple the damages in addition to attorney fees and trial expenses, according to the bill.
Scams and fraud have resulted in higher-cost loans, payment of hidden and unnecessary fees, and unfair billing practices by health care companies, according to the bill sponsored by Sen. Leroy Comrie (D-Queens) and Assemb. Micah Lasher (D-Manhattan).
The bill would provide more authority to the attorney general’s office, including the power to further assess civil penalties on scammers. The bill would also strengthen outdated state laws for what enforcers consider unfair practices, even if no law was violated.
But business interests fear the bill language is too broad and will spur unnecessary state sanctions and private lawsuits.
"The definitions of what is abusive or unfair are very broad, making it inevitable that we will see an increase of unpredictable litigation and unwieldy class action suits if this bill becomes a law," said Kathyrn Wylde, president of Partnership for New York City. "This is an example of how legislation contributes to the affordability crisis in New York, by generating new risks and increased costs which are inevitably passed along to consumers, while trial lawyers are the major beneficiary."
One of the duties of the attorney general’s office is investigating consumer complaints, but those cases have relied on federal laws and enforcers, James said.
"Today, we cannot rely on the federal consumer protection laws — in fact, we cannot rely on the federal government," James said Thursday at a news conference.
"The FAIR Business Practices Act will ... allow my office to go after anyone who violates the law and I look forward to working with my partners in state government to ensure that as Washington retreats from protecting consumers, New York steps up to lead," James said.
She referred to the February announcement by President Donald Trump’s administration that it plans to dismantle the federal Consumer Financial Protection Bureau.
The bureau was created to better protect Americans from fraud and mistakes by lenders and the financial sector after the 2008 Great Recession, which began with a crisis in mortgage lending. The bureau was created in a bipartisan measure in 2010 by Congress as an independent monitor of the nation’s largest banks, credit card companies and lenders. Its actions have included limiting overdraft checking fees and investigating predatory lending practices.
Conservatives including Trump’s supporters in business have long questioned the authority of the bureau to oversee, regulate and sue financial institutions and private companies.
Lasher said Trump’s attempt to dismantle the federal bureau signals "nothing but green lights" to scammers.
The independent Brennan Center for Justice at the New York University School of Law said closing the bureau "looks to be another example of the donor class holding sway over Washington."
The bureau regulated "the sort of deceptive and abusive financial practices that led to the 2008 financial crisis, in which millions of Americans lost their homes and life savings," stated the Brennan Center in its response to Trump’s attempt to close the consumer protection agency.
There was no immediate comment from the state Business Council.
Lasher said the measure will give James the tools she needs to protect consumers against "corporate greed."
"Consumer protection is about affordability," Lasher said at Thursday’s news conference. "This will protect consumers from the high cost of unfair business practices."
ALBANY — State Attorney General Letitia James on Thursday backed a legislative proposal that she said is needed to better protect New Yorkers from scams by deceptive auto salespersons, abusive debt collectors, disreputable lenders and other deceptive business operators after action by the Trump administration made consumers more vulnerable.
The bill is named Fostering Affordability and Integrity through Reasonable Business Practices, or the FAIR Act. It is intended to strengthen state consumer protection law and enforcement to combat unfair business practices that can confuse and deceive consumers. James said the scams often target New Yorkers for whom English is the second language and other vulnerable consumers.
The measure would address cases involving mortgages and property deeds; artificial intelligence schemes; the illegal internet crime known as phishing; hard-to-cancel subscription for goods and services; nursing homes suing relatives of residents; identity theft and other deceptive and abusive crimes, James said.
She said the measure will have a "cure provision" that will allow businesses to correct their actions and avoid civil action by her office. The proposal would expand current state law that targets "deceptive business acts and practices" to include "a broad range of unfair, deceptive and abusive business practices."
Violators of the proposed measure would face a civil penalty of up to $1,000 plus damages and costs of the victim. If a court finds the operator "willfully or knowingly violated" the law, the award could rise to triple the damages in addition to attorney fees and trial expenses, according to the bill.
Scams and fraud have resulted in higher-cost loans, payment of hidden and unnecessary fees, and unfair billing practices by health care companies, according to the bill sponsored by Sen. Leroy Comrie (D-Queens) and Assemb. Micah Lasher (D-Manhattan).
The bill would provide more authority to the attorney general’s office, including the power to further assess civil penalties on scammers. The bill would also strengthen outdated state laws for what enforcers consider unfair practices, even if no law was violated.
But business interests fear the bill language is too broad and will spur unnecessary state sanctions and private lawsuits.
"The definitions of what is abusive or unfair are very broad, making it inevitable that we will see an increase of unpredictable litigation and unwieldy class action suits if this bill becomes a law," said Kathyrn Wylde, president of Partnership for New York City. "This is an example of how legislation contributes to the affordability crisis in New York, by generating new risks and increased costs which are inevitably passed along to consumers, while trial lawyers are the major beneficiary."
Investigating complaints
One of the duties of the attorney general’s office is investigating consumer complaints, but those cases have relied on federal laws and enforcers, James said.
"Today, we cannot rely on the federal consumer protection laws — in fact, we cannot rely on the federal government," James said Thursday at a news conference.
"The FAIR Business Practices Act will ... allow my office to go after anyone who violates the law and I look forward to working with my partners in state government to ensure that as Washington retreats from protecting consumers, New York steps up to lead," James said.
She referred to the February announcement by President Donald Trump’s administration that it plans to dismantle the federal Consumer Financial Protection Bureau.
The bureau was created to better protect Americans from fraud and mistakes by lenders and the financial sector after the 2008 Great Recession, which began with a crisis in mortgage lending. The bureau was created in a bipartisan measure in 2010 by Congress as an independent monitor of the nation’s largest banks, credit card companies and lenders. Its actions have included limiting overdraft checking fees and investigating predatory lending practices.
Conservatives including Trump’s supporters in business have long questioned the authority of the bureau to oversee, regulate and sue financial institutions and private companies.
Opportunity for scams?
Lasher said Trump’s attempt to dismantle the federal bureau signals "nothing but green lights" to scammers.
The independent Brennan Center for Justice at the New York University School of Law said closing the bureau "looks to be another example of the donor class holding sway over Washington."
The bureau regulated "the sort of deceptive and abusive financial practices that led to the 2008 financial crisis, in which millions of Americans lost their homes and life savings," stated the Brennan Center in its response to Trump’s attempt to close the consumer protection agency.
There was no immediate comment from the state Business Council.
Lasher said the measure will give James the tools she needs to protect consumers against "corporate greed."
"Consumer protection is about affordability," Lasher said at Thursday’s news conference. "This will protect consumers from the high cost of unfair business practices."
Michael Gormley has worked for Newsday since 2013, covering state government, politics and issues. He has covered Albany since 2001.
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