Consumer advocates across New York State were thrilled when Gov. Hochul unveiled the first plank of her 2024 State of the State agenda at a press conference in January. She announced her goal of amending New York’s notoriously weak consumer protection law and catching us up to 42 other states with stronger statutes.
New York — which has a paltry penalty of $50 and only bans deceptive but not unfair and abusive practices — has been an outlier for so long, it was refreshing to see a commitment to modernizing our consumer protection law in a way that could address the needs of New Yorkers like those we serve in our work providing free civil legal services.
Why is improving New York’s law so important? Consumer protection statutes play an integral role in creating a fair economy with equal opportunities for all, including and especially for communities that disproportionately suffer from economic — and relatedly racial and social — inequities.
As advocates working with people of lower incomes, experiencing poverty, or in crisis, we regularly hear from New Yorkers who find their way to our hotlines, offices, and clinics seeking accountability after predatory entities leave them in dire financial predicaments — because you don’t need to be well versed in the law to know when something is fundamentally unfair.
Consider a common situation in which a car dealer strings a buyer along for hours until they are worn down; then the dealer has the buyer sign a contract with different terms than what the parties negotiated, and to top it off, the dealer includes hidden add-ons that increase the cost of the loan and gives them a higher cut.
Or consider the senior who is drowning in debt and because they are afraid of having their benefits garnished or being thrown into jail, retains a debt settlement company that promises relief. But that company, while collecting a monthly fee for often zero services, does not explain that benefits, like Social Security, are exempt from garnishment and there is no debtor’s prison in New York, keeping the consumer trapped
While deceptive, unfair, and abusive practices are rooted in systemic racism — and disproportionately impact people of color and of lower incomes – no one is immune. Take Bravo host Andy Cohen’s recent experience: the contents of his bank account were siphoned after he fell victim to an imposter scam, something that happens regularly to our clients.
If you are famous and well-resourced you might be able to rectify such wrongdoing, but New Yorks’ current consumer protection law likely won’t be of much help as its applicability is limited to only deceptive practices that impact the public at large. In fact, New Yorkers who buy goods across the border in New Jersey have more protections than those that support New York businesses.
Consumer protection laws are tools for Davids in a world of Goliaths, and right now, our state has a unique opportunity to empower New Yorkers, hold bad actors accountable, and deter bad practices altogether. With state budget negotiations still underway, two proposals are on the table.
As she promised at her press conference, the governor has a bill to ban unfair and abusive practices to address the above examples and hold all actors in the marketplace accountable — from nursing homes and landlords to carpet cleaners and lenders — but as drafted, it won’t benefit most of our clients because it doesn’t eliminate the court-imposed requirement that a bad act must impact the public at large to bring a claim, which prevents our clients from bringing their individual claims to court.
Instead, New York should adopt the state Senate budget proposal, called CSPA (the Consumer and Small Business Protection Act), which bans unfair and abusive practices; allows consumers to redress individual wrongs; has a balanced notice requirement to give businesses that make a mistake a chance to fix a problem without being hauled to court; increases damages from $50 to $1,000; allows for statutory state class actions with a sensible cap on damages; and mandates attorney’s fees for the prevailing party, which the governor agrees is important.
The Senate’s proposal offers New York a consumer protection law that would go a long way toward achieving social, racial, and economic justice, while also accomplishing the governor’s goal of modernizing New York’s outdated consumer protection law and putting money back in the pockets of New Yorkers.
Cantanno is associate director of the consumer protection unit at New York Legal Assistance Group. Coffey is director of litigation for economic justice at Mobilization for Justice.
