Amd §§349, 349-c, 350-d & 350-e, add §349-f, Gen Bus L
Relates to consumer protection from deceptive acts and practices; increases damages and directs consumers on bringing an action for such deceptive acts and practices.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9785
SPONSOR: Titone TITLE OF BILL: An act to amend the general business law, in relation
to consumer protection from unfair or deceptive acts or practices
PURPOSE:
The purpose of this bill is to enhance the effectiveness of New York's
Consumer Protection Law and deter the use of unfair or deceptive acts or
practices.
SUMMARY OF SPECIFIC PROVISIONS:
This bill amends various sections of Article 22-A of the General Busi-
ness Law, which provides consumer protections for deceptive acts or
practices, as follows:
Section one of the bill would amend section 349 of the General business
law by making changes to subdivisions (a) and (h) and adding a new
subdivision (i).
-Subdivision (a) of section 349-of the General Business Law, which
currently declares "deceptive acts or practices" unlawful, would be
amended to add that unfair acts or practices are also unlawful.
-Subdivision (h) of section 349 of the General Business Law would be
amended to increase the minimum award an injured party may recover in a
private action arising from a violation of the section from $50 to $500,
increase the cap on treble damages the court may award for intentional
or willful violations of this section from $1,000 to $10,000, grant the
court discretion to award punitive damages of up to three times the
amount of the actual damages, and mandate that a prevailing plaintiff in
such an action shall be awarded reasonable attorney's fees and costs.
-The new subdivision (i) of section 349 of the General Business Law
would lay out the factors the court shall consider in determining wheth-
er an act or practice is unfair, including whether the defendant knew or
should have known he or she was (1) taking advantage of the consumer's
inability to understand an agreement; or (2) charged the consumer a
price that, at the time the transaction took place, grossly exceeded
that of similar, readily available property or services.
Section two of the bill amends section 349-c of the General Business Law
to increase the maximum civil penalty imposed for acts prohibited under
sections 349, 349-f, 350-c, and 350-c of the General Business Law perpe-
trated against people 65 years of age or older.
Section three of the bill amends the General Business Law by adding a
new section 349-f that would allow for class action suits to be brought
when appropriate for violations of Article 22-A of the General Business
Law that entitle an individual consumer to bring a civil action.
Section four of the bill amends section 350-d of the General Business
Law to increase the maximum civil penalty for violations of Article 22-A
of the General Business Law,
Section five of the bill would amend section 350-e of the General busi-
ness law by making changes to subdivisions (3) and adding a new subdivi-
sion (4).
-Subdivision 3 of section 350-e of the General Business Law would be
amended to mandate that a prevailing plaintiff in an action brought by a
consumer for a violation of section 350 or 350-a of the General Business
Law shall be awarded reasonable attorney's fees and costs.
-The new subdivision (4) of section 350-e of the General Business Law
would establish additional civil liability for any intentional violation
of an injunction prohibiting unfair or deceptive acts practices issued
pursuant to this section. Further, upon petition by the Attorney Gener-
al, the court may order the canceling of any certificates filed under
the provisions of section 310 of the General Business Law for habitual
violation of injunctions issued pursuant to Article 22-A of the General
Business Law.
Section six of the bill sets forth the effective date.
JUSTIFICATION:
New York's landmark prohibition against deceptive acts or practices was
enacted in 1970. In 1980, the statute was significantly improved when a
provision granting aggrieved consumers a right of action. Since that
time, however, New York's law has not kept pace with other state consum-
er protection statutes.
The effectiveness of New York's statute is hampered by the fact that it
does not allow private individuals to bring an action for unfair prac-
tices and by outdated caps on civil liabilities and damage awards for
violations.
Individual consumers and consumer attorneys are often disinclined to
bring an action against a violator for $50, or up to $1,000 for knowing
or willful violations, due to the imbalance between the amount that may
be recovered and the costs of litigation, and, as such, violators are
not brought to justice and consumers are left unprotected.
This bill would bring New York's consumer protection statute in line
with more protective statutes in other states by enhancing remedies and
civil penalties. These improvements would serve to provide a significant
deterrent to unscrupulous businesses that seek to treat consumers
unfairly or deceptively and ensure that consumers who are victimized are
able to obtain justice and be made whole.
FISCAL IMPACT ON THE STATE:
It is anticipated that the increased civil penalties imposed on viola-
tors would result in an increase in revenue for the State.
FISCAL IMPACT ON LOCALITIES:
None.
IMPACT ON THE REGULATION OF BUSINESSES AND INDIVIDUALS:
The bill would prohibit businesses from engaging in unfair acts or prac-
tices. The bill also increases the amount a consumer may be awarded in a
private action brought against a business for a violation of section 349
of the General Business Law and allows for consumers to bring class
action suits for violations of Article 22-A of the General Business Law.
IMPACT ON FINES, IMPRISONMENT, FORFEITURE OF RIGHTS, OR OTHER PENAL
SANCTIONS:
The bill would increase the maximum civil penalties for prohibited acts
under Article 22-A of the General Business Law from $5,000 to $10,000.
Additionally, the bill would increase the maximum civil penalties for
certain prohibited acts under Article 22-A of the General Business Law
perpetrated against consumers 65 years of age or older from $10,000 to
$20,000. Lastly, the bill would impose civil liability not to exceed
$5,000 on any business that intentionally violates any injunction
prohibiting unfair acts or practices. Where such conduct is of a contin-
uing nature, each day of such conduct is separate violation. In the case
of businesses that habitually violate such injunctions, the Attorney
General may petition the court to order the cancelation of various
certificates required filed under section 130 of the General Business
Law.
LEGISLATIVE HISTORY:
2017: A08169(Kavanagh)- Enacting Clause Stricken in Rules
2016: A01161(Dinowitz)- On the Floor
2015: A01161(Dinowitz)- On the Floor
2014: A00312A(Dinowitz)- On the Floor
2013: A00312(Dinowitz)- Codes
2012: A08381(Dinowitz)- Codes
2011: A08381(Dinowitz)- Consumer Affairs and Protection
2010: A10306(Pheffer)-Codes
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law.
