NY Attorney General Letitia James Proposes Overhaul of State UDAP Provision

Overview: New York’s Attorney General Letitia James has advanced a proposal to revise the state's consumer protection law governing unfair or deceptive acts or practices (UDAP). The proposed legislation, known as the Fostering Affordability and Integrity through Reasonable Business Practices Act (FAIR Business Practices Act or Act), aims to revise Article 22-A of New York's General Business Law, most notably to add prohibitions of "unfair" and "abusive" business practices.[1] Under New York's current UDAP law, "deceptive" acts or practices are unlawful, but unfair and abusive practices are not expressly prohibited, unlike many other states' UDAP statutes.[2]

Takeaways: The New York Attorney General's FAIR Business Practices Act is the latest example of how states are attempting to fill the void left by retrenching federal consumer protection agencies, including the Consumer Financial Protection Bureau (CFPB).

I. Expanded Scope and Application: The FAIR Business Practices Act is written to be comprehensive.

• It prohibits not only "deceptive" business acts and practices but also those that are "unfair" or "abusive."[3] The Act defines "unfair" and "abusive" using language similar to that in the Consumer Financial Protection Act (CFPA). However, the Act's definition of "unfair" lacks a provision similar to the CFPA’s § 5531(c)(2), which allows regulators to consider established public policies as a basis for determining whether an act or practice is unfair.[4]
• It protects not only consumers but also businesses and non-profits,[5] and applies to "any business, trade or commerce or in the furnishing of any service [in New York]."[6]
• It permits the attorney general to bring an action against any person conducting business or providing services in New York, regardless of whether (i) the person is located in New York or (ii) the business or service is conducted outside of New York.[7]

II. Expanded Rights and Damages: The FAIR Business Practices Act would:

• Increase the damages available in a private right of action from (i) the greater of $50 or actual damages under current law to (ii) $1,000 in statutory damages plus the affected person’s actual damages, if any.[8]
• In the event of a willful or knowing violation, remove the court's discretion and instead require the court to award to a prevailing plaintiff (i) reasonable attorney's fees, including expenses for expert witness fees, costs, and (ii) treble damages.[9]
• Allow class action lawsuits to recover actual, statutory, or punitive damages if the prohibited act or practice "has caused damage to others similarly situated." [10]
• Expand the availability of supplemental civil penalties beyond the elderly to include a new category of "vulnerable persons."
  • New York General Business Law § 349-c currently provides for supplemental civil penalties in cases where the victim is an elderly person. The FAIR Business Practices Act would expand the scope of § 349-c to apply generally to a new class of "vulnerable persons,"[11] defined as:
    • persons under the age of 18;
    • persons who are 65 or older;
    • active-duty members and veterans of the United States Armed Forces;
    • persons with a physical or mental impairment substantially limiting "one or more major life activities;" and
    • persons with limited English proficiency.[12]

III. Affirmative Defenses: The FAIR Business Practices Act would create several affirmative defenses, notably:

• If the plaintiff is a person other than an individual or a "small entity." A "small entity" would be defined as an entity that meets all of the following criteria:
  • is independently owned and operated;
  • is not dominant in its field;
  • is either a not-for-profit corporation or employs 300 or fewer individuals;
  • received less than $500 million in gross revenue and support in the past fiscal year; and
  • possessed total assets of no more than $250 million in the last fiscal year.^[13]
• If the act or practice complained of is either (i) redressable pursuant to federal securities or intellectual property laws; or (ii) arose in the course of a high-value experienced commercial transaction and was directed exclusively to the parties to that transaction (practices in the context of residential housing are excluded from this defense).[14]
  • A "high-value experienced commercial transaction" is defined as one where the value exceeds $1 million, and all parties have "extensive commercial experience with the subject matter of such transaction" (although the experience of the defendant is not considered in that determination).[15]
• The FAIR Business Practices Act would also eliminate compliance with federal rules as a complete defense to actions under New York's UDAP statute.[16] Instead, it would create an affirmative defense that is available when 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 any other federal agency.[17]

Steptoe will continue to monitor the progress of the FAIR Business Practices Act through the New York state legislature and will provide updates as significant events occur. We also will soon publish a more detailed analysis of the emerging trend of state authorities increasing protections in light of diminishing federal oversight.

[1] Press Release, New York Attorney General Letitia James, Attorney General James Takes Action to Protect New York Consumers and Small Businesses (Mar. 13, 2025) https://ag.ny.gov/press-release/2025/attorney-general-james-takes-action-protect-new-york-consumers-and-small. Bill text available at: https://ag.ny.gov/sites/default/files/2025-03/fostering-affordability-and-legislative-bill-drafting-commission-integrity-through-reasonable-business-practices-fair-business-practices-act-2025.pdf.

[2] See N.Y. Gen. Bus. L. § 349.

[3] FAIR Business Practices Act at § 349.

[4] See 12 U.S.C. §§ 5531(c)(1) (defining “unfairness”); 5531(d) (defining "abusive");

[5] Id. at § 348 (“Businesses and non-profits, particularly small businesses and non-profits, are themselves a class of consumers. There is no reason to believe that a small entity is any better able to defend itself from unfair, abusive, and deceptive conduct than a consumer, or needs the protections of this article any less than a consumer does.”).

[6] Id. at § 349.

[7] Id. at § 349(b).

[8] Id. at § 349(h)(1).

[9] Id.

[10] Id. at § 349(h)(4)(i).

[11] Id. at § 349-c(1).

[12] Id.

[13] Id. at § 349(h)(2)(i).

[14] Id. at § 349(h)(2)(ii).

[15] Id. at § 349(h)(2)(ii)(B).

[16] N.Y. Gen. Bus. L. § 349(d).

[17] FAIR Business Practices Act at § 349(d).