‘Riddled with loopholes': Business groups slam NY attorney general Letitia James' consumer bill as legal ‘shakedown scheme'

Time of India

13-05-2025

File photo: New York attorney general Letitia James
New York attorney general
Letitia James
is under fire from prominent business groups over her proposed
FAIR Business Practices Act
, with critics warning it could expose
small businesses
to a wave of 'legal shakedowns' driven by opportunistic attorneys, reported The New York Post.
The legislation, aimed at cracking down on
consumer scams
like deed theft, junk fees and AI-powered fraud, is being pitched as a way to protect New Yorkers from abusive practices. But business advocates argue the bill would strip key legal safeguards and lead to a surge in frivolous lawsuits.
'The so-called FAIR Act would be anything but fair to New York's business community, especially Main Street businesses,' Tom Stebbins, executive director of the
Lawsuit Reform Alliance of New York
, was quoted as saying by the New York Post.
He warned it 'replaces due process with a system that invites abuse' by encouraging profit-driven law firms to target small companies with settlement threats.
Stebbins said the bill would allow attorneys to demand pre-suit settlements, creating 'a cottage industry of legal shakedowns' where small businesses settle even baseless claims to avoid costly legal battles.
James, however, has defended the bill as essential in an era of growing digital fraud and reduced federal enforcement.
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'At a time when the federal government is making life harder, we want to make life easier for New Yorkers,' she said in March, as per the New York Post. 'The FAIR Business Practices Act will close loopholes that make it too easy for New Yorkers to be scammed.'
The bill targets a wide range of deceptive practices, from student loan servicers steering borrowers into expensive plans, to insurance companies listing in-network doctors who don't accept certain plans.
It also aims to hold car dealers and nursing homes accountable for misleading or abusive conduct.
Still, business groups argue the bill's definitions are vague and open to exploitation. Chelsea Lemon of the Business Council said lawmakers should reject the bill if they are 'truly serious about addressing affordability.'
Ashley Ranslow from the National Federation of Independent Businesses warned it could 'make it easier for lawyers to shake down small businesses with vague legal threats.'
Justin Wilcox of Upstate United echoed similar concerns, saying the legislation is 'riddled with loopholes lawyers will exploit for profit, not justice.'
Despite the backlash, James' office shared support from groups like the Student Borrower Protection Center and the Small Business Majority. As quoted by New York Post, Winston Berkman-Breen from the borrower group said, 'New Yorkers need the state to pass the FAIR Business Practices Act.'
Lindsey Vigoda added that the bill would 'shield Main Street businesses from predatory lenders.'
The legislative push comes as James faces mounting political heat. The Trump administration recently referred her for criminal investigation over alleged mortgage fraud. The justice department probe, centred on claims she misrepresented properties to gain better loan terms, has sparked fierce debate. US President Trump, speaking from the Oval Office, called her 'a total crook' and a 'disaster for New York.'
James has denied any wrongdoing. Her lawyer, Abbe Lowell said the disputed filings were either mistaken or based on outdated records and accused the Trump administration of political retribution. 'She will not be intimidated by bullies, no matter who they are,' a spokesperson was quoted as saying by the BBC.