Raising the Bar: New York Expands Consumer Protection Law with FAIR Business Practices Act

New York Governor Kathy Hochul has signed into law the most significant update to New York’s consumer protection law in 45 years — the Fostering Affordability and Integrity through Reasonable Business Practices Act, or FAIR Business Practices Act — expanding the scope of the state’s authority to now challenge unfair and abusive business practices. The measure, backed by New York Attorney General (“AG”) Letitia James and signed on December 19, 2025, amends New York’s General Business Law § 349, giving regulators new tools to protect consumers and promote fair marketplace practices.

Strengthening Protections for New Yorkers

The new law broadens the scope of what may be considered unlawful business conduct under state law. Previously, New York’s consumer protection statute banned only deceptive acts or practices. The new law adds a new public right of action; the AG may file suit for both “unfair” and “abusive” practices — even in the absence of deception.

The law grants the AG with power to bring legal actions against companies that exploit consumers through practices that are either unfair^[1]— causing substantial injury not reasonably offset by benefits — or abusive,^[2]meaning interfering with a consumer’s understanding or taking unreasonable advantage of their situation. As to the “unfair” prong, this change brings New York in line with consumer protection laws in 42 other states that also regulate “unfair” practices. “Abusive” practices, on the other hand, are prohibited in only a few states’ unfair, deceptive, and abusive practices (UDAP) laws. Courts determining the actions that rise to the level of abusive practices will likely look to other states’ precedents that also prohibit abusive practices, such as California, Connecticut, and Nevada. The private right of action permitted under the current law remains and applies only to deceptive acts or practices.

Legislative Support and Industries of Interest

The expansion of the law to unfair and abusive practices was a priority for AG James and consumer advocates, who believed it was crucial for holding businesses accountable in evolving markets. Lawmakers argue that expanding the law to address unfair and abusive conduct reflects the realities of today’s digital economy and gives regulators flexibility to address harmful practices as new products and services emerge.

AG James praised the new law, declaring it a “historic advancement” for consumer rights. She also made a point to mention specific industries that may be an enforcement priority for her office: auto lenders, mortgage and student loan servicers, and health care companies, among others.

Understanding the Larger Regulatory Landscape

The FAIR Business Practices Act follows changes made in the Federal Trade Commission’s (FTC) Rule on Unfair or Deceptive Fees, California’s Consumers Legal Remedies Act Section 1170(1)(29), and New York’s Arts and Cultural Affairs Law (ACA) Section 25.07. Each of these new rules exemplifies the current regulatory push for increased transparency and consumer fairness in pricing. The FAIR Business Practices Act sets out to expand on the ACA and reduce misleading practices such as “drip pricing” or “junk fees” — outside of the live entertainment industry.

With increased regulatory uncertainty related to AI at the federal level, state consumer protection laws like the FAIR Business Practices Act are poised to become even more important, filling gaps where federal enforcement lags. Although the FAIR Business Practices Act does not specially call out artificial intelligence, AG James has made clear that its updates to the state’s UDAP laws would help “protect New Yorkers from a wide array of scams, including . . . artificial intelligence (AI)-based schemes.” The state’s UDAP statue prohibits certain pricing practices that utilize AI (e.g., section 349-A), with other states like Utah taking similar steps to regulate consumer-facing AI under its UDAP laws.

Implications for Businesses

For entities conducting business in New York  — regardless of whether the entity is located in the state — the new law raises the bar for compliance and expands the AG’s ability to pursue civil penalties and restitution against businesses that use unfair or abusive practices against state residents.

Companies should review their sales, marketing, and service practices to ensure they do not inadvertently engage in conduct that could be deemed unfair or abusive — even if not technically deceptive. In particular, companies engaging in the following business activities should revisit their compliance with the updated law: algorithmic pricing, AI in consumer-facing tools, providing goods or services through automatic renewal subscriptions, and drip pricing for goods or services.

We would like to thank associate Ariana Gilani for her contribution to this alert.