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S00795 Summary:

BILL NOS00795A
 
SAME ASNo Same As
 
SPONSORCOMRIE
 
COSPNSRBAILEY, BRISPORT, BROUK, CHU, CLEARE, FERNANDEZ, GIANARIS, GONZALEZ, GOUNARDES, HARCKHAM, HINCHEY, HOYLMAN-SIGAL, JACKSON, KAVANAGH, KRUEGER, LIU, MAY, MAYER, MYRIE, PALUMBO, PARKER, RAMOS, RIVERA, RYAN, SALAZAR, SANDERS, SEPULVEDA, SERRANO, SKOUFIS, THOMAS
 
MLTSPNSR
 
Amd §349, Gen Bus L
 
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.
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S00795 Actions:

BILL NOS00795A
 
01/06/2023REFERRED TO CONSUMER PROTECTION
01/03/2024REFERRED TO CONSUMER PROTECTION
06/03/2024AMEND (T) AND RECOMMIT TO CONSUMER PROTECTION
06/03/2024PRINT NUMBER 795A
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S00795 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         795--A
 
                               2023-2024 Regular Sessions
 
                    IN SENATE
 
                                     January 6, 2023
                                       ___________
 
        Introduced  by  Sens.  COMRIE,  BAILEY,  BRISPORT,  BROUK,  CHU, CLEARE,
          FERNANDEZ, GIANARIS, GONZALEZ, GOUNARDES, HARCKHAM, HINCHEY,  HOYLMAN-
          SIGAL,  JACKSON,  KAVANAGH,  KRUEGER, LIU, MAY, MAYER, MYRIE, PALUMBO,
          PARKER, RAMOS, RIVERA, RYAN,  SALAZAR,  SANDERS,  SEPULVEDA,  SERRANO,
          SKOUFIS, THOMAS -- read twice and ordered printed, and when printed to
          be committed to the Committee on Consumer Protection -- recommitted to
          the Committee on Consumer Protection in accordance with Senate Rule 6,
          sec.  8  --  committee  discharged, bill amended, ordered reprinted as
          amended and recommitted to said committee
 
        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

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02751-06-4

        S. 795--A                           2
 
     1  exploitation,  along  with  all  consumer transactions. This legislation
     2  therefore rejects the limitation, imposed  by  courts,  that  prohibited
     3  conduct  be  "consumer oriented," have an impact on the public at large,
     4  or  be  part  of  a  broader pattern. Consumers and small businesses are
     5  entitled to redress whenever they are harmed by  deceptive,  unfair,  or
     6  abusive conduct.
     7    For  any  of these protections to be meaningful, the State must ensure
     8  that the remedies for prohibited conduct provide an effective deterrent.
     9  This legislation therefore updates the statutory damages for  violations
    10  for the first time in decades, from $50 to $1,000, and allows meaningful
    11  punitive  damages  for  particularly egregious behavior. The Legislature
    12  recognizes that unfair, deceptive, and abusive practices have a  partic-
    13  ular  impact on poor individuals, people of color, and those affected by
    14  natural disasters and health emergencies, including the COVID-19 pandem-
    15  ic. For this reason, the State must ensure that  limited  resources  not
    16  prevent  individuals  and  small  businesses from seeking remedies. This
    17  legislation therefore opens access to  justice  by  making  recovery  of
    18  attorney's  fees  mandatory  for  a prevailing plaintiff and authorizing
    19  class actions.
    20    § 3. Section 349 of the general business law, as added by  chapter  43
    21  of  the  laws  of 1970, subdivision (h) as amended by chapter 157 of the
    22  laws of 1984, and subdivision (j) as added by section 6 of  part  HH  of
    23  chapter 55 of the laws of 2014, is amended to read as follows:
    24    §  349.  [Deceptive acts] Unfair, deceptive, or abusive acts and prac-
    25  tices unlawful. (a) [Deceptive] Any unfair, deceptive or abusive acts or
    26  practices in the conduct of any business, trade or commerce  or  in  the
    27  furnishing of any service in this state are hereby declared unlawful.
    28    (1)  For  the  purposes  of this section, an act or practice is unfair
    29  when it causes or is likely to cause substantial injury, the  injury  is
    30  not  reasonably  avoidable, and the injury is not outweighed by counter-
    31  vailing benefits.
    32    (2) For the purposes of this section, an act or  practice  is  abusive
    33  when:
    34    (i)  it  materially  interferes with the ability of a person to under-
    35  stand a term or condition of a product or service; or
    36    (ii) takes unreasonable advantage of:
    37    (A) a person's lack of understanding of the material risks, costs,  or
    38  conditions of the product or service; or
    39    (B) a person's inability to protect such person's interests in select-
    40  ing or using a product or service.
    41    (b)  Whenever  the attorney general shall believe from evidence satis-
    42  factory to [him] the attorney general that any person, firm, corporation
    43  or association or agent or employee thereof has engaged in or  is  about
    44  to  engage in any of the acts or practices stated to be unfair, unlawful
    45  [he], deceptive or abusive, the attorney general may bring an action  in
    46  the  name and on behalf of the people of the state of New York to enjoin
    47  such unlawful acts or practices and to obtain restitution of any  moneys
    48  or property obtained directly or indirectly by any such unlawful acts or
    49  practices.  In such action preliminary relief may be granted under arti-
    50  cle sixty-three of the civil practice law and rules.   Such actions  may
    51  be  brought  regardless  of  whether  or not the underlying violation is
    52  directed at individuals or businesses, is consumer-oriented, or involves
    53  the offering of goods, services, or property  for  personal,  family  or
    54  household purposes.
    55    (c) Before any violation of this section is sought to be enjoined, the
    56  attorney  general shall be required to give the person against whom such

        S. 795--A                           3
 
     1  proceeding is contemplated notice by certified mail and  an  opportunity
     2  to show in writing within five business days after receipt of notice why
     3  proceedings  should  not be instituted against [him] such person, unless
     4  the  attorney general shall find, in any case in which [he] the attorney
     5  general seeks preliminary relief, that to give such notice and  opportu-
     6  nity is not in the public interest.
     7    (d)  In any such action it shall be a complete defense that the act or
     8  practice is, or if in interstate  commerce  would  be,  subject  to  and
     9  complies  with  the  rules and regulations of, and the statutes adminis-
    10  tered by, the federal trade commission or any official department, divi-
    11  sion, commission or agency of the United States  as  such  rules,  regu-
    12  lations  or  statutes are interpreted by the federal trade commission or
    13  such department, division, commission or agency or the federal courts.
    14    (e) Nothing in this section shall apply to  any  television  or  radio
    15  broadcasting  station  or  to  any  publisher or printer of a newspaper,
    16  magazine or other form of printed or  digital  advertising,  who  broad-
    17  casts, publishes, or prints the advertisement.
    18    (e-1)  Nothing  in  this section pertaining to abusive or unfair prac-
    19  tices, or the provisions of subdivision (h) of this section, shall apply
    20  to:
    21    (1) a federal covered investment adviser,  an  investment  adviser  as
    22  defined  in  13  NYCRR  Part  11,  a broker or dealer as those terms are
    23  defined in section three hundred fifty-nine-e  of  this  chapter,  or  a
    24  federally  chartered  bank,  other  than  for  an  act  or  practice  in
    25  connection with loans for the purpose of financing  the  purchase  of  a
    26  motor vehicle as defined in section one hundred twenty-five of the vehi-
    27  cle and traffic law, or loans for the purpose of financing postsecondary
    28  education and expenses related thereto; or
    29    (2)  any person or entity subject to article twenty-four of the insur-
    30  ance law, or their affiliates.
    31    (f) In connection with any proposed proceeding under this section, the
    32  attorney general is authorized to take proof and make a determination of
    33  the relevant facts, and to issue subpoenas in accordance with the  civil
    34  practice law and rules.
    35    (g)  This section shall apply to all [deceptive] unfair, deceptive, or
    36  abusive acts or practices [declared to  be  unlawful],  whether  or  not
    37  subject  to  any other law of this state, and shall not supersede, amend
    38  or repeal any other law of this state under which the  attorney  general
    39  is authorized to take any action or conduct any inquiry.
    40    (h)  (1)  In  addition  to the right of action granted to the attorney
    41  general pursuant to this section, any person who  has  been  injured  by
    42  reason  of  any  violation  of this section may bring an action in [his]
    43  such person's own name to enjoin  such  unlawful  act  or  practice,  an
    44  action  to  recover  [his  actual damages or fifty dollars, whichever is
    45  greater, or both such actions] one thousand dollars  and  such  person's
    46  actual  damages,  if  any,  or  both  such  actions. Such actions may be
    47  brought regardless of whether or not the underlying violation is consum-
    48  er-oriented, has a public impact or  involves  the  offering  of  goods,
    49  services  or  property  for personal, family or household purposes.  The
    50  court may, in its discretion, increase  the  award  of  damages  [to  an
    51  amount  not  to exceed three times the actual damages up to one thousand
    52  dollars,] if the  court  finds  the  defendant  willfully  or  knowingly
    53  violated this section. The court [may] shall award reasonable attorney's
    54  fees and costs to a prevailing plaintiff.
    55    (2)  At  least  thirty  days before any person other than the attorney
    56  general may bring an action pursuant to paragraph one of  this  subdivi-

        S. 795--A                           4
 
     1  sion,  such  person shall send the party against whom any such action is
     2  contemplated, the "respondent", notice by certified mail to the respond-
     3  ent's place of  business.  Such  notice  must  reasonably  describe  the
     4  unfair, deceptive, or abusive acts or practices at issue, state a demand
     5  for relief, and include the sender's mailing address or e-mail address.
     6    (3)  A  respondent  receiving notice pursuant to paragraph two of this
     7  subdivision may, within ten days of delivery  of  such  notice,  make  a
     8  written tender of settlement by certified mail or by e-mail, if provided
     9  in  the  notice. If such relief is rejected, in any subsequent action on
    10  the basis of the noticed conduct, the respondent may  file  the  written
    11  tender  of  settlement with an affidavit concerning its rejection and if
    12  such settlement is deemed complete relief by the court or tribunal,  the
    13  court or tribunal may limit any recovery to the relief tendered therein.
    14  A  settlement  shall  be deemed complete only if the respondent provides
    15  statutory damages, actual damages, if any, and corrects and  permanently
    16  ceases  such  acts  or practices described in the notice as to all other
    17  impacted persons, and if such settlement was  filed  with  the  attorney
    18  general in accordance with paragraph seven of this subdivision.
    19    (4)  A  notice pursuant to paragraph two of this subdivision shall not
    20  be required prior to the filing of an action if:
    21    (i) such action is brought as a counterclaim or crossclaim;
    22    (ii) the sending of such notice would cause immediate and  irreparable
    23  injury, loss, or damages;
    24    (iii)  the  person bringing the action is not represented by an attor-
    25  ney;
    26    (iv) a mailing address for the respondent is not reasonably  discerni-
    27  ble;
    28    (v)  filing suit is necessary to prevent the expiration of the statute
    29  of limitations;
    30    (vi) the respondent has previously been the subject of  an  action  by
    31  the attorney general for substantially similar conduct;
    32    (vii)  the  respondent has already received a notice pursuant to para-
    33  graph four of this subdivision for substantially similar conduct; or
    34    (viii) there are other exigent circumstances.
    35    (5) Any respondent seeking to tender settlement pursuant to  paragraph
    36  three  of this subdivision shall file documentation of such offer, along
    37  with the underlying notice provided to the respondent pursuant to  para-
    38  graph  four,  with  the  attorney  general.  The  attorney general shall
    39  promulgate regulations establishing the process for filing such  notices
    40  and  responses in the state register. The attorney general may amend the
    41  process for filing such notices and responses at any time.
    42    (6) A failure by a respondent to file with the attorney general pursu-
    43  ant to paragraph five of this subdivision within seven days of  deliver-
    44  ing a response to a notice sent pursuant to paragraph two of this subdi-
    45  vision shall itself be considered a violation of this section subject to
    46  an  action brought by the attorney general through subdivision b of this
    47  section, provided, however, that any failure  filed  with  the  attorney
    48  general  prior  to the attorney general having established a process for
    49  such filing shall not be actionable. A violation for failure to file  on
    50  time  shall  be  subject  to  a civil penalty not to exceed five hundred
    51  dollars for each day such violation continues, in addition to any  other
    52  penalties available under this section for prohibited acts or practices.
    53    (i)  Notwithstanding  any law to the contrary, all monies recovered or
    54  obtained under this article by a  state  agency  or  state  official  or
    55  employee  acting in their official capacity shall be subject to subdivi-
    56  sion eleven of section four of the state finance law.

        S. 795--A                           5
 
     1    (j) This section is intended to expand  and  not  take  away  existing
     2  consumer rights.
     3    §  4. Severability. If any part or provision of this act or its appli-
     4  cation to a person  is  held  invalid,  the  invalidity  of  that  part,
     5  provision  or  application  does  not  affect other parts, provisions or
     6  applications of this act that can be given effect  without  the  invalid
     7  provision or application.
     8    §  5.    This  act  shall take effect on the one hundred twentieth day
     9  after it shall have become a law.
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