Introduction: The Dawn of a New Consumer Era in New York

For over half a century, the marketplace in New York State operated under a legal framework that, while well-intentioned, became increasingly antiquated in the face of modern commerce. Since 1970, New York General Business Law (GBL) § 349 served as the primary shield for consumers, declaring “deceptive acts or practices” unlawful. However, as the decades passed and the economy evolved from brick-and-mortar storefronts to algorithmic trading, digital subscriptions, and complex financial instruments, the limitation of the law became glaringly apparent. A business could legally engage in conduct that was oppressive, coercive, or fundamentally unfair, provided it did not technically lie to the consumer. This “deception-only” standard left New York consumers—and honest businesses—vulnerable to predatory practices that were illegal in nearly every other jurisdiction in the country.

On December 19, 2025, Governor Kathy Hochul signed into law the Fostering Affordability and Integrity Through Reasonable (FAIR) Business Practices Act (Senate Bill 8416/Assembly Bill 8427), fundamentally altering the commercial landscape of the Empire State. This legislation, championed by Attorney General Letitia James and sponsored by Senator Leroy Comrie and Assemblymember Micah Lasher, represents the most significant expansion of New York consumer protection law in 45 years. By prohibiting “unfair” and “abusive” business practices in addition to deceptive ones, the FAIR Act brings New York into alignment with federal standards and empowers the state to police a much broader range of predatory conduct.

However, the enactment of the FAIR Business Practices Act creates a complex new legal reality for consumers and businesses alike. While the Attorney General gains sweeping new enforcement powers—including the ability to prosecute unfair conduct that is not “consumer-oriented”—the private right of action for individual lawsuits remains restricted to “deceptive” acts. This distinction creates a perilous gap for consumers facing debt collection lawsuits, foreclosure proceedings, or identity theft issues. While the state can sue for unfairness, the individual defendant must still navigate the narrower channels of deception or rely on federal statutes like the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA).

This comprehensive report provides an exhaustive analysis of the FAIR Business Practices Act. We will explore its legislative history, dissect the new definitions of “unfair” and “abusive,” analyze the removal of the “consumer-oriented” doctrine for Attorney General actions, and examine the profound implications for industries ranging from debt collection to student lending. Most importantly, this report elucidates why retaining specialized legal counsel, such as the experienced attorneys at Cannon Legal PLLC, is more critical than ever. In a legal environment where the Attorney General wields a sword that private citizens cannot touch, having a defender who understands the interplay between state “unfairness” standards and federal “deception” statutes is the key to protecting your financial future. 

The Historical Context: The Long Road to Fairness

To fully appreciate the magnitude of the FAIR Business Practices Act, one must understand the legal regime it amends. For fifty years, New York’s consumer protection law was an outlier, lacking the robust “unfairness” prohibitions found in the Federal Trade Commission (FTC) Act and the laws of 42 other states. 

The Legacy of General Business Law § 349

Enacted in 1970, GBL § 349 was designed to be a broad remedial statute. It declared “deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state” to be unlawful. The statute was originally enforceable only by the Attorney General, with a private right of action added in 1980 to encourage private enforcement and relieve the burden on state prosecutors. 

However, judicial interpretation over the subsequent decades significantly narrowed the statute’s application. The New York Court of Appeals, in seminal cases such as Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank (1995) and Stutman v. Chemical Bank (2000), established a stringent three-part test for a GBL § 349 claim:

1. The challenged act or practice must be “consumer-oriented.”

2. The act or practice must be “misleading in a material way.”

3. The plaintiff must have suffered injury as a result of the deceptive act. 

The “Consumer-Oriented” Barrier

The “consumer-oriented” requirement proved to be a formidable hurdle, particularly in disputes involving small businesses or unique transactions. Courts consistently held that private contract disputes, or acts that did not have a “broad impact on consumers at large,” fell outside the statute’s purview. This doctrine effectively immunized bad actors in business-to-business (B2B) transactions and limited the Attorney General’s ability to intervene in complex financial schemes that targeted specific investors rather than the general public. 

For example, in New York University v. Continental Insurance Co. (1995), the Court of Appeals held that an insurance coverage dispute was not consumer-oriented because the policy was unique to the university. This line of reasoning often left small businesses and non-profits without recourse when they were victimized by predatory vendors or lenders, as they could not prove the conduct affected the “public at large”. 

The “Deception” Limitation

Perhaps the most significant deficiency of the old GBL § 349 was its limitation to “deceptive” acts. A practice is deceptive only if it is “likely to mislead a reasonable consumer acting reasonably under the circumstances”. This standard failed to capture conduct that was transparent but inherently unfair.

Consider a scenario where a payday lender charges an astronomical interest rate and uses aggressive collection tactics. If the lender discloses the rate in bold print and strictly follows the contract terms, a court might find no “deception” occurred, even if the terms were unconscionable and the collection tactics were abusive. The “unfairness” doctrine, which focuses on substantial injury and lack of avoidability, was absent from New York law, leaving a regulatory void that predatory businesses could exploit with impunity.

The Federal Pullback and State Activism

The impetus for the FAIR Act was not merely the obsolescence of the 1970 statute, but a shift in the federal regulatory landscape. In the years leading up to 2025, federal enforcement by agencies like the Consumer Financial Protection Bureau (CFPB) faced periods of fluctuation and retrenchment.

The CFPB, under various administrations, vacillated on the aggressiveness of its enforcement of “abusive” acts and practices. In January 2025, the CFPB issued a report explicitly urging states to fill this gap by strengthening their own consumer protection laws. The report recommended that states incorporate the federal definitions of “unfair” and “abusive” into their own statutes to ensure a consistent layer of protection regardless of federal political winds.

New York answered this call decisively. Attorney General Letitia James, recognizing that “federal authorities are presently at risk of falling into desuetude,” championed the FAIR Act to ensure that New York regulators possessed the necessary tools to protect their citizens independent of Washington.

Decoding the FAIR Business Practices Act (S.B. 8416)

The FAIR Business Practices Act is a targeted but transformative amendment to Article 22-A of the General Business Law. It does not repeal the existing framework; rather, it expands it to cover new categories of misconduct and empowers the Attorney General to police the marketplace more effectively.

Legislative Overview and Timeline

The journey of S.B. 8416 (and its Assembly counterpart A.8427) reflects a concerted effort to modernize New York’s commercial code.

• Introduction: The bill was introduced in May 2025 by Senator Leroy Comrie and Assemblymember Micah Lasher at the request of the Attorney General.

• Committee Review: It moved through the Consumer Affairs and Protection, Codes, and Rules committees, overcoming opposition from business groups who feared the expansion of liability would lead to frivolous litigation.²

• Passage: The Senate passed the bill on June 13, 2025, with a vote of 37-22. The Assembly followed suit on June 17, 2025.

• Enactment: Governor Hochul signed the bill into law on December 19, 2025 (Chapter 708).

• Effective Date: The Act takes effect 60 days after signing, on February 17, 2026.¹⁷

The Core Statutory Amendments

The FAIR Act amends GBL § 349 in three fundamental ways:

1. Expansion of Prohibited Conduct: The statute now prohibits “unfair” and “abusive” acts or practices in addition to “deceptive” ones.

2. Removal of the “Consumer-Oriented” Requirement for the AG: The Act explicitly states that an act or practice is actionable by the Attorney General “regardless of whether or not that act or practice is consumer-oriented”.¹

3. Expansion of Protected Class: The legislative intent section (new § 348) clarifies that the law protects “businesses and non-profits as well as individuals,” recognizing that small entities are often just as vulnerable as individual consumers.

Table 1: Comparison of Pre-2026 and Post-2026 GBL § 349

This bifurcation of enforcement power—giving the Attorney General the “unfairness” sword while leaving private plaintiffs with only the “deception” shield—is the defining characteristic of the new law. It reflects a legislative compromise intended to empower regulators while preventing a potential flood of class-action litigation based on the broader “unfairness” standard.

Defining “Unfairness”: The New Standard of Liability

For the first time, New York law defines what constitutes an “unfair” business practice. The statute adopts the definition used by the Federal Trade Commission (FTC) under Section 5 of the FTC Act (15 U.S.C. § 45(n)), providing a rich body of federal case law to guide interpretation.   

Under the FAIR Act, an act or practice is unfair if it meets a three-part test:

1. Substantial Injury: The act causes or is likely to cause substantial injury to a person.

2. Not Reasonably Avoidable: The injury is not reasonably avoidable by the person.

3. No Countervailing Benefits: The injury is not outweighed by countervailing benefits to consumers or to competition.   

1. Substantial Injury

The “substantial injury” requirement is the threshold inquiry. Under federal precedent, which New York courts will now look to, “substantial” does not necessarily mean “large” in terms of dollars, but rather “real” and “non-speculative.”

• Monetary Harm: Small fees charged to millions of consumers constitute substantial injury.

• Non-Monetary Harm: The Act and its sponsor memo clarify that “injury” includes impairment of interests such as loss of time, loss of privacy, or loss of security.   

• Business Injury: Crucially, the Act extends this definition to include injury to persons other than consumers, explicitly protecting small businesses from unfair B2B practices.   

2. Not Reasonably Avoidable

This prong focuses on consumer choice and market structure. An injury is not reasonably avoidable if the consumer’s ability to make a free and informed choice is interfered with.

• Coercion: If a consumer is forced to buy a product to get another service (tying), the injury is not avoidable.

• Information Asymmetry: If critical information is withheld or buried in legalese until after the transaction is sealed, the consumer cannot avoid the harm.

• “Roach Motel” Tactics: If a subscription is easy to sign up for but impossible to cancel (requiring hours on the phone), the financial injury of continued billing is not reasonably avoidable. 

3. Countervailing Benefits

This is a balancing test. A practice that harms some consumers might be legal if it lowers prices for everyone or incentivizes innovation. However, practices like “junk fees” or “drip pricing” generally fail this test because they distort price competition rather than enhancing it.

Defining “Abusiveness”: The Higher Bar

The FAIR Act also introduces a prohibition on “abusive” acts, a standard derived from the Dodd-Frank Act and the Consumer Financial Protection Bureau (CFPB). An abusive act is distinct from an unfair one; it focuses less on the outcome (injury) and more on the conduct (interference with understanding). 

An act or practice is abusive if it:

1. Materially Interferes with the ability of a person to understand a term or condition of a product or service; OR

2. Takes Unreasonable Advantage of:

   • A lack of understanding on the part of a person of the material risks, costs, or conditions of the product or service;

   • The inability of a person to protect their own interests in selecting or using a product or service; or

   • The reasonable reliance by a person on a person engaging in the act or practice to act in the relying person’s interests.

Material Interference

This covers “dark patterns”—user interfaces designed to trick users.

• Examples: A “close” button that actually installs software; a digital contract that scrolls automatically; double-negative checkboxes for data consent. The harm here is the subversion of the consumer’s autonomy.

Unreasonable Advantage

This prong targets the exploitation of vulnerability.

• Lack of Understanding: Selling complex derivatives to unsophisticated retail investors or elderly consumers who cannot comprehend the risk.

• Inability to Protect Interests: Price gouging during a natural disaster, or a debt collector pressuring a consumer who is hospitalized or incarcerated.

• Reasonable Reliance: This is critical in the student loan context. Borrowers rely on servicers to guide them to the best repayment plan. If a servicer steers a borrower into forbearance (which is profitable for the servicer) instead of an Income-Driven Repayment plan (which is better for the borrower), they are taking unreasonable advantage of that reliance. 

The “Consumer-Oriented” Shift: Unleashing the Attorney General

One of the most consequential changes in the FAIR Act is the removal of the “consumer-oriented” requirement for Attorney General enforcement actions.

The Death of the Doctrine (for the AG)

Previously, defendants could dismiss AG lawsuits by arguing that the alleged misconduct was a “private dispute” or did not affect the public at large. This defense is now dead for state enforcement actions. The text is explicit: “The attorney general has a special responsibility to the public to create a fair marketplace for all… regardless of whether or not that act or practice is consumer-oriented”.

Implications for Business-to-Business (B2B) Disputes

The AG can now intervene in purely commercial disputes if they involve unfairness.

• Example: A large supplier uses its market power to impose unfair terms on small “mom-and-pop” retailers in New York. Under the old law, this was a contract dispute. Under the FAIR Act, the AG can sue the supplier for “unfair” business practices, citing substantial injury to the small businesses.

• Small Business Protection: The Act’s legislative intent emphasizes that small businesses and non-profits need protection just as much as individuals. This opens the door for the AG to police merchant cash advances (MCAs), equipment leasing scams, and predatory franchise agreements.

Industry-Specific Impacts: Where the Hammer Falls

The FAIR Act’s broad definitions will ripple across every sector of the New York economy, but certain industries face heightened scrutiny.

Debt Collection and Credit Reporting

For Cannon Legal PLLC, this is ground zero. The debt collection industry is already heavily regulated by the FDCPA, but the FAIR Act creates new state-level liability.

• Zombie Debt: Collecting on time-barred debt (debt older than the statute of limitations) without proper disclosure is deceptive. Under the FAIR Act, it is also “unfair” and “abusive,” as it takes unreasonable advantage of the consumer’s lack of legal knowledge.  

• Seizing Exempt Funds: A debt collector who freezes a bank account containing only Social Security benefits causes “substantial injury” that is “not reasonably avoidable” by the senior citizen. This is now a clear-cut “unfair” practice actionable by the AG.  

• Coerced Debt: New York recently enacted S.1353, which protects survivors of domestic violence from “coerced debt” (debt incurred by an abuser in the victim’s name). The FAIR Act complements this by making the collection of such debt “abusive” if the collector is on notice of the coercion. It defines economic abuse as a form of “duress” or “force,” aligning with the “inability to protect interests” prong of abusiveness. 

Student Loan Servicing

Attorney General James explicitly cited student loan servicers as targets for the new law.  

• Steering: Servicers often push borrowers into forbearance because it requires less paperwork than enrolling them in IDR plans. This exploits the borrower’s “reasonable reliance” on the servicer for expertise, a textbook “abusive” practice under the new § 349.

• Misrepresentation: Failing to inform borrowers about recertification deadlines for Public Service Loan Forgiveness (PSLF) constitutes “material interference” with the borrower’s understanding of loan terms.

Automotive Sales and Financing

The “unfairness” doctrine strikes hard at common dealership tactics in auto sales and financing.

• The Hostage ID: A dealer refusing to return a customer’s driver’s license or keys to prevent them from leaving the lot is an “unfair” practice (substantial injury to liberty/time, not avoidable).

• Yo-Yo Financing: Telling a buyer financing is approved, letting them take the car, and then demanding they return it or sign a new contract at a higher rate is both deceptive and abusive (taking advantage of the inability to protect interests once the car is in possession). 

Healthcare and Insurance

• Ghost Networks: Health insurers that publish directories of “in-network” doctors who are actually retired, dead, or not accepting patients cause “substantial injury” (delayed care, out-of-network bills). This is now actionable as an “unfair” practice.  

• Medical Debt: Suing family members for a deceased relative’s medical debt is a specific target. This practice exploits the family’s grief and lack of legal knowledge (“abusive”) and causes financial harm they do not legally owe (“unfair”). 

Technology and AI

The FAIR Act is forward-looking, designed to capture “new and emerging technologies”.  

• Algorithmic Bias: If an AI model for tenant screening or loan underwriting disproportionately rejects minority applicants, it causes “substantial injury” that is not avoidable. The AG can now probe the fairness of the algorithm, not just whether its use was disclosed. 

• Dark Patterns: Subscription services that use confusing interfaces to prevent cancellation are engaging in “material interference” with the consumer’s understanding of the cancellation terms.

The Private Right of Action: Strategies for the Consumer

While the Attorney General has been given a “nuclear option” with the unfair/abusive standards, private consumers have been given a more limited toolkit. This distinction is crucial.

The “Deception” Limit

The text of the FAIR Act leaves the private right of action under GBL § 349(h) largely unchanged. A private plaintiff must still prove the act was deceptive. You generally cannot sue a business solely because their conduct was “unfair” or “abusive” under the state definitions.

• Why? Business lobbying groups successfully argued that a private right of action for “unfairness” would lead to a flood of frivolous class actions over minor grievances.

• The “Consumer-Oriented” Requirement Remains: For private lawsuits, the courts still require the conduct to be “consumer-oriented.” A private contract dispute between two individuals or businesses does not qualify for GBL § 349(h) relief unless it has a broader public impact.

Litigation Strategies for Private Attorneys

Despite these limitations, the FAIR Act significantly aids private litigation in indirect ways. Skilled attorneys at firms like Cannon Legal PLLC utilize the following strategies:

1. The “Omission” Argument: Often, an “unfair” practice involves hiding the ball. If a practice is unfair because it traps a consumer, it is likely also deceptive because the business failed to disclose the trap. By reframing “unfairness” as a “deceptive omission,” private counsel can survive a motion to dismiss.

2. Federal Law Bridge: The definitions of unfair/abusive in the FAIR Act mirror the FDCPA and CFPB standards. A consumer attorney can sue in federal court under the FDCPA (which does allow private suits for unfairness) and use the state law’s finding of unfairness to bolster the federal claim.

3. Affirmative Defenses: If you are sued by a creditor, you can use the FAIR Act defensively. You can argue that the contract is void or unenforceable because it was procured through “abusive” conduct that violates public policy as defined by the new statute. This is a powerful tool in debt defense.

4. The “Unclean Hands” Doctrine: In equity, a plaintiff (creditor) cannot seek relief if they have “unclean hands.” If a creditor violated the FAIR Act’s “unfair” prohibition, a defendant can argue they are barred from collecting the debt in court. 

Why You Need Cannon Legal PLLC: Your Shield in the FAIR Era

The complexity of the FAIR Business Practices Act—specifically the gap between the AG’s powers and the individual’s rights—makes professional legal representation indispensable. A “Do-It-Yourself” approach to consumer defense is now more dangerous than ever; pleading “unfairness” in a private complaint without establishing “deception” could lead to immediate dismissal.

Cannon Legal PLLC stands at the forefront of this new legal landscape, offering a unique blend of deep consumer law expertise and aggressive litigation defense.

1. Expertise in the Interplay of State and Federal Law

The attorneys at Cannon Legal, including Firm Managing Attorney John Helstowski and New York attorney D. Giacomo Vilella, are experts in bridging the gap between New York state law and federal statutes.

• John Helstowski: A seasoned Texas attorney anchoring claims against third party debt collectors in actionable federal statutes like the FDCPA or FCRA. 

• D. Giacomo Vilella: With extensive experience in MCA Defense and consumer litigation, Jack brings a strategic depth to debt defense, understanding how to use the threat of FAIR Act violations to negotiate favorable settlements or dismissals.

2. Comprehensive Debt Defense Strategy

When you hire Cannon Legal PLLC, you aren’t just getting a lawyer to file a form. You are getting a strategic partner who will:

• Audit the Debt: Scrutinize the chain of title and collection history for “unfair” or “abusive” practices (e.g., robocalling, zombie debt collection) that violate the new state standards.

• Deploy the FAIR Act Defensively: Use the new statutory definitions of “abusiveness” to challenge the validity of the debt in court, arguing that the creditor’s conduct effectively voided the obligation.

• Counter-Sue: Identify opportunities to file counterclaims under the FDCPA or FCRA, leveraging the evidence of “unfairness” to support federal damages.

3. A Holistic Approach to Financial Health

Cannon Legal PLLC goes beyond simple defense. Their practice areas include:

• Bankruptcy: If the debt is valid but overwhelming, they can guide you through Chapter 7 or 13, using the “unfairness” of creditor claims to potentially discharge disputed amounts. 

• Identity Theft: With the new focus on “coerced debt” and data security breaches as “unfair” practices, Cannon Legal can aggressively clear your name and credit report.

• Student Loan Defense: Utilizing the new focus on servicer “steering,” they can challenge abusive repayment allocations and fight for your right to forgiveness programs. 

Contact Cannon Legal PLLC Today:

• Website: https://nycreditattorney.com/

• Phone: (800) 890-8585

• Locations: Serving clients throughout New York

Conclusion: Securing Your Rights in a Changing Landscape

The passage of the FAIR Business Practices Act is a monumental victory for consumer rights in New York. It signals that the state will no longer tolerate businesses that exploit loopholes, use coercion, or profit from consumer confusion. The definitions of “unfair” and “abusive” provide a new moral and legal compass for the marketplace, one that demands integrity and transparency.

However, a law is only as powerful as its enforcement. For the individual consumer, the FAIR Act is a shield, not a sword. While the Attorney General fights the battles of the public at large, you must fight your own battles in the courtroom. Whether you are dealing with a relentless debt collector, a deceptive auto dealer, or a negligent student loan servicer, you cannot rely solely on the state to intervene in your specific case.

You need a dedicated advocate who understands the intricacies of this new legislation. You need a team that can translate the high ideals of the FAIR Act into concrete legal defenses and counterclaims. You need Cannon Legal PLLC.

Don’t navigate this new era alone. If you are facing financial challenges or believe you have been the victim of unfair business practices, contact us today. Let us turn the promise of fairness into a reality for you.

Cannon Legal PLLC

• Website: https://nycreditattorney.com/

• Phone: (800) 890-8585

• Your Partner in Consumer Defense.