|SAME AS||No Same As|
|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.|
|02/07/2018||referred to consumer affairs and protection|
|03/06/2018||reported referred to codes|
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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.
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STATE OF NEW YORK ________________________________________________________________________ 9785 IN ASSEMBLY February 7, 2018 ___________ Introduced by M. of A. TITONE -- read once and referred to the Committee on Consumer Affairs and Protection AN ACT to amend the general business law, in relation to consumer protection from unfair or deceptive acts or practices The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivisions (a) and (h) of section 349 of the general 2 business law, subdivision (a) as added by chapter 43 of the laws of 1970 3 and subdivision (h) as amended by chapter 157 of the laws of 1984, are 4 amended and a new subdivision (i) is added to read as follows: 5 (a) [ Deceptive] Unfair or deceptive acts or practices in the conduct 6 of any business, trade or commerce or in the furnishing of any service 7 in this state are hereby declared unlawful. 8 (h) (1) In addition to the right of action granted to the attorney 9 general pursuant to this section, any person who has been injured by 10 reason of any violation of this section may bring an action in his own 11 name to enjoin such unlawful act or practice, an action to recover his 12 actual damages or [ fifty] five hundred dollars, whichever is greater, or 13 both such actions. The court may, in its discretion, increase the award 14 of damages to an amount not to exceed three times the actual damages up 15 to [ one] ten thousand dollars, if the court finds the defendant willful- 16 ly or knowingly violated this section. The court may also award punitive 17 damages in an amount not to exceed three times the actual damages and 18 provide any equitable relief the court considers necessary or proper. 19 (2) The court [ may] shall award reasonable attorney's fees and costs 20 to a prevailing plaintiff. 21 (i) In determining whether an act or practice is unfair, the court 22 shall consider circumstances of which the defendant knew or reasonably 23 should have known, including, but not limited to the following: 24 (1) that the defendant took advantage of the inability of the consumer 25 to reasonably protect the consumer's interests because of the consumer's 26 physical infirmity, illiteracy or inability to understand the language 27 of an agreement; EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00081-03-7A. 9785 2 1 (2) that at the time the consumer transaction was entered into, the 2 price grossly exceeded the price at which similar property or services 3 were readily obtainable in similar transactions by similar consumers; 4 § 2. Paragraph (a) of subdivision 2 of section 349-c of the general 5 business law, as added by chapter 687 of the laws of 1996 and such 6 section as renumbered by chapter 189 of the laws of 1999, is amended to 7 read as follows: 8 (a) In addition to any liability for damages or a civil penalty 9 imposed pursuant to sections three hundred forty-nine, three hundred 10 forty-nine-f, three hundred fifty-c and three hundred fifty-d of this 11 [ chapter] article, regarding deceptive practices and false advertising, 12 and subdivision twelve of section sixty-three of the executive law, 13 regarding proceedings by the attorney general for equitable relief 14 against fraudulent or illegal consumer fraud, a person or entity who 15 engages in any conduct prohibited by said provisions of law, and whose 16 conduct is perpetrated against one or more elderly persons, may be 17 liable for an additional civil penalty not to exceed [ ten] twenty thou- 18 sand dollars, if the factors in paragraph (b) of this subdivision are 19 present. 20 § 3. The general business law is amended by adding a new section 349-f 21 to read as follows: 22 § 349-f. Civil action. Any consumer entitled to bring an action under 23 this article may, if the unlawful act or practice has caused damage to 24 other consumers similarly situated, bring an action on behalf of himself 25 or herself and such other consumers to recover damages or obtain other 26 relief as provided for in this article. 27 Any action brought under this subdivision shall comply with article 28 nine of the civil practice law and rules. 29 § 4. Section 350-d of the general business law, as amended by chapter 30 208 of the laws of 2007, is amended to read as follows: 31 § 350-d. Civil penalty. Any person, firm, corporation or association 32 or agent or employee thereof who engages in any of the acts or practices 33 stated in this article to be unlawful shall be liable to a civil penalty 34 of not more than [ five] ten thousand dollars for each violation, which 35 shall accrue to the state of New York and may be recovered in a civil 36 action brought by the attorney general. In any such action it shall be a 37 complete defense that the advertisement is subject to and complies with 38 the rules and regulations of, and the statutes administered by the 39 Federal Trade Commission or any official department, division, commis- 40 sion or agency of the state of New York. 41 § 5. Subdivision 3 of section 350-e of the general business law, as 42 amended by chapter 328 of the laws of 2007, is amended and a new subdi- 43 vision 4 is added to read as follows: 44 3. Any person who has been injured by reason of any violation of 45 section three hundred fifty or three hundred fifty-a of this article may 46 bring an action in his or her own name to enjoin such unlawful act or 47 practice, an action to recover his or her actual damages or five hundred 48 dollars, whichever is greater, or both such actions. The court may, in 49 its discretion, increase the award of damages to an amount not to exceed 50 three times the actual damages, up to ten thousand dollars, if the court 51 finds that the defendant willfully or knowingly violated this section. 52 The court [ may] shall award reasonable attorney's fees and costs to a 53 prevailing plaintiff. 54 4. (a) In addition to any other applicable penalty, any person who 55 intentionally violates any injunction prohibiting unfair or deceptive 56 acts or practices issued pursuant to this article shall be liable for aA. 9785 3 1 civil penalty not to exceed five thousand dollars for each violation. 2 Where the conduct constituting a violation is of a continuing nature, 3 each day of that conduct is a separate and distinct violation. In deter- 4 mining the amount of the civil penalty, the court shall consider all 5 relevant circumstances, including, but not limited to, the extent of the 6 harm caused by the conduct constituting a violation, the nature and 7 persistence of that conduct, the length of time over which the conduct 8 occurred, the assets, liabilities, and net worth of the defendant, 9 whether corporate or individual, and any corrective action taken by the 10 defendant. 11 (b) Upon petition by the attorney general, the court may for habitual 12 violation of injunctions issued pursuant to this article order the 13 canceling of any certificate filed under and by virtue of the provisions 14 of section one hundred thirty of this chapter. 15 § 6. This act shall take effect on the ninetieth day after it shall 16 have become a law.