Connect with us

Bussiness

N.Y. businesses push back against consumer protection bill

Published

on

Dozens of business organizations from across the state are fighting hard against lawmakers’ efforts to expand consumer protections — shifting their pushback into high gear by sending a letter to all members of the Legislature this week with three weeks of session remaining.

More than 30 business groups, led by the Business Council of New York State, warn small businesses will suffer the consequences if legislation is signed into law to enhance the state’s consumer protection laws after 44 years.

“The inclusion of ‘unfair’ and ‘abusive’ practices in the general business law, coupled with the nearly 2,000% increase in statutory damages and the mandate for courts to award attorney’s fees, threatens to dramatically increase extortionate litigation,” business leaders wrote. “The expansion proposed here is overly broad and relies heavily on subjective interpretations. This could lead to a surge in lawsuits against businesses of all sizes.”

The legislation, nicknamed the Consumer & Small Business Protection Act, would expand state business law to prohibit “unfair” and “abusive” practices. Only deceptive conduct is prohibited under current law.

Lawmakers said they have confidence the legislation will clear both houses before session ends June 6 despite steep pushback from business leaders.

“I’m confident we’re going to be able to come together to push a final bill that’s going to be good for consumers in New York state and good for small businesses in New York state,” said Sen. Sean Ryan, a Buffalo Democrat.

But business leaders who strongly disagree argued Friday expanding the law will open up small businesses to frivolous lawsuits, which in turn, would drive up costs for consumers.

Paul Zuber, the executive vice president of the state Business Council, said it’s an expense small businesses cannot sustain amid inflation and increased workers comp and unemployment insurance costs.

“It will be very easy to bring an action against a small business, assume for $5,000 to $10,000, and we all know that most small businesses would rather pay out and settle rather than at the expense of having lawyers and going to court,” Zuber said.

Zuber wants to work with lawmakers on a compromise for next year, but supporters argue the law hasn’t been updated in 44 years and is long overdue.

Chuck Bell, programs director with Consumer Reports, argue small businesses have continued to thrive in the other 43 U.S. states that already ban “unfair” and “abusive” practices.

“This is the year that the bill should pass, and hysterical arguments against the bill are not going to carry the day, ” Bell said Friday. “…The business opponents are acting like Chicken Little… who had an acorn fall on her head and then she said the sky was falling.”

Bell argues consumers will be better protected from bully sales tactics and other unfair business practices, and embolden entrepreneurs to go to court if they get cheated in contracts with large corporations.

“It’s time to do it — it’s time to give consumers the ability to challenge unfair practices that are costing people money and harming them in many other ways,” he added.

But Gov. Kathy Hochul, a moderate Democrat, is often partial to the state Business Council and has vetoed several pieces of legislation in the last few years that the organization has lobbied against.

Business leaders hope they still have the governor’s ear, and her trend of killing bills they don’t want will continue.

“We do appreciate the fact that she understands that out-migration is real in New York state and she understands that businesses are frustrated,” Zuber said.

Serious discussions to expand consumer protections statewide started in January after Hochul included the proposal in her State of the State address and budget agenda. It ultimately fell out of the final budget over consumer-oriented conduct, or court requirements to prove a business’ pattern of abuse to mandate consumers show an incident isn’t isolated.

Continue Reading