Dozens of business groups in the state are fiercely resisting efforts by lawmakers to expand consumer protections, sending a letter to all members of Congress this week with three weeks left in the session to express their pushback. It’s getting serious.
More than 30 business groups led by the New York State Business Council are warning that small businesses will suffer the consequences if a bill tightening the state’s consumer protection laws for the first time in 44 years is signed into law.
“The inclusion of “unfair” and “abusive” practices in general commercial law, combined with a nearly 2,000% increase in statutory damages and the requirement for courts to award attorneys’ fees, has dramatically increased the number of extravagant lawsuits. “There is a risk that this will increase,” the business leaders wrote. “The expansion proposed here is too broad and relies heavily on subjective interpretation, which could lead to a surge in litigation against businesses of all sizes.”
The bill, called the Consumer and Small Business Protection Act, would expand state business law to prohibit “unfair” and “abusive” practices. Current law only prohibits deceptive acts.
Lawmakers said they were confident the bill would pass both chambers by the end of the session on June 6, despite fierce opposition from business leaders.
“I am confident that we can come together to advance a final bill that will benefit New York consumers and New York small businesses,” said Sen. Sean Ryan of Buffalo. Democratic Party.
But business leaders strongly opposed it argued Friday that expanding the law would expose small businesses to frivolous lawsuits, which would increase costs for consumers.
Paul Zuber, executive vice president of the State Business Council, said the cost is an intolerable expense for small businesses amid rising inflation and the cost of workers’ compensation and unemployment insurance.
“It is very easy to file a lawsuit against a small business, and assuming the amount is between $5,000 and $10,000, most small businesses would rather pay and settle the case than hire a lawyer and go to court. “Everyone knows that,” Zuber said. He said.
Zuber hopes to work with lawmakers to find a compromise next year, but supporters say the law has not been updated in 44 years and is long overdue.
Chuck Bell, program director at Consumer Reports, argues that small businesses continue to thrive in the 43 other U.S. states that already prohibit “unfair” and “abusive” practices.
“This is the year to get the bill passed and not have the hysterical debate over the bill continue to this day,” Bell said Friday. “…adversaries in business are behaving like Chicken Little, who had an acorn fall on his head and said the sky was falling.”
Bell argues that consumers will be better protected from aggressive sales tactics and other unfair business practices, and entrepreneurs will be emboldened to go to court if they are cheated out of contracts with big companies.
“Now is the time to do it. It’s time to give consumers the ability to challenge unfair practices that make people waste money and harm people in many other ways.” he added.
But Gov. Kathy Hochul, a moderate Democrat, has often been friendly to the State Business Council and has vetoed several bills the group has campaigned against in recent years.
Business leaders hope the governor still listens to them, and his trend of repealing bills they don’t want will continue.
“We appreciate the fact that she understands that the exodus is real in New York State and understands that businesses are frustrated,” Zuber said. Ta.
Serious discussions to expand consumer protections across the state began in January after Hochul included the proposal in his State of the State address and budget agenda. It was ultimately dropped from the final budget due to pro-consumer practices and court requirements to prove a pattern of corporate abuse, which requires consumers to show that incidents are not isolated.
