New York business groups are raising alarm bells over Attorney General Tish James’ latest initiative aimed at enhancing consumer protections. Critics argue that this pro-consumer push could inadvertently foster a landscape ripe for legal shakedowns, with an undue advantage favoring opportunistic lawyers.
The Controversial FAIR Business Practices Act
The centerpiece of this debate is James’ FAIR Business Practices Act, designed to fortify consumer protections against a range of dubious practices, including deed theft, excessive junk fees, and burdensome subscription renewals. However, many in the business community fear that, rather than shielding consumers, the act might leave small businesses vulnerable to frivolous lawsuits.
Critics Voice Concerns
Tom Stebbins, the executive director of the Lawsuit Reform Alliance of NY, argues passionately, “The so-called FAIR Act would be anything but fair to New York’s business community, particularly for Main Street businesses.” He contends that the act undermines crucial legal safeguards, diluting essential due process protections that ensure claims are legitimate and plaintiffs have standing to sue.
Stebbins elaborates, “The bill would specifically authorize profit-driven law firms to send pre-suit settlement letters demanding fees, effectively creating a cottage industry of legal shakedowns targeting small businesses, often not for any wrongdoing, but due to their inability to mount a legal defense.”
Scope of the Proposed Legislation
The FAIR Act specifically targets a range of nefarious activities, including:
- Artificial intelligence scams
- Online phishing schemes
- Data breaches
- Exploitative student loan services
- Unethical car dealerships
- Shady nursing homes
- Health insurance companies providing misleading networks
Despite its noble intentions, advocates for small businesses argue that the act could place additional, unintended burdens on them. A study cites that “excess tort costs” already impose a staggering $61.8 billion in unnecessary legal expenses on New Yorkers.
Voices from the Business Community
Ashley Ranslow, New York state director for the National Federation of Independent Businesses, expressed her concerns: “James’ proposal paves the way for lawyers to shake down small businesses through vague legal threats. Lawmakers should focus on cutting costs and supporting small businesses instead of paving the way for wealthy lawyers to sue them into oblivion.”
Justin Wilcox, executive director of Upstate United, warns that the bill contains “vague definitions” that could be exploited for profit rather than justice. Business Council lobbyist Chelsea Lemon echoed these sentiments, urging Governor Kathy Hochul and state lawmakers to reject the bill if they are truly committed to enhancing affordability for residents.
James’ Resilience Amid Backlash
Despite the vigorous backlash from business interests, Attorney General James has shown no signs of backing down. During a press conference in March, she stated, “When the federal government is making life harder, we want to make life easier for New Yorkers.” She emphasized that the FAIR Business Practices Act aims to close loopholes that facilitate scams, allowing her office to pursue violators actively.
James’ office highlighted endorsements from organizations like the Student Borrower Protection Center and the Small Business Majority, indicating some level of support for the FAIR Act.
Legal Challenges and Upcoming Investigations
However, James is not without her controversies. Recently, the Justice Department initiated a criminal probe into allegations of mortgage fraud against her. The taxpayers may bear the burden of legal costs associated with this ongoing investigation, raising questions about accountability.
James vehemently rejects the allegations, deeming them “baseless” and asserting that the federal probe is part of a “revenge tour” by the Trump administration, stemming from her civil fraud charges against him and his organization. She has famously claimed, “No one is above the law,” when spearheading her investigation into Trump, which culminated in a dramatic $454 million judgment.
Conclusion: A Controversial Crossroads
The FAIR Business Practices Act presents a significant shift in the landscape of consumer protection that could have far-reaching implications for small businesses throughout New York. As the debate unfolds, stakeholders on both sides are keenly watching how these policies will impact not only consumer protections but also the very foundation of small businesses in the state.
