Exclusive | Letitia James pro-consumer push could spark legal shakedowns and boost greedy lawyers, businesses say
New York business groups are blasting Attorney General Tish James for a pro-consumer push that they fear would be a legislative misfire — boosting greedy lawyers and unleashing “legal shakedowns.”James’ FAIR Business Practices Act looks to tighten up consumer protections to crack down on shady crimes like deed theft, junk fees and hard-to-cancel subscriptions, but critics said it will open up small businesses to frivolous lawsuits and legal threats.“The so-called FAIR Act would be anything but fair to New York’s business community, especially Main Street businesses,” said Tom Stebbins, executive director of the Lawsuit Reform Alliance of NY.“It strips away longstanding legal safeguards and due process protections — like ensuring that claims are consumer-oriented or that plaintiffs actually have standing to sue — and replaces them with a system that invites abuse,” Stebbins added.“The bill would specifically authorize profit-motivated law firms to send letters demanding pre-suit settlements for damages and fees,” Stebbins said.“That’s a recipe for a cottage industry of legal shakedowns, where small businesses are targeted not for wrongdoing, but because they lack the resources to fight back.”The act targets companies engaged in artificial intelligence-based schemes, online phishing scams and data breaches.
It also takes aim at student loan services that steer borrowers into more expensive repayment plans, unscrupulous car dealers, shady nursing homes that sue relatives of deceased residents for unpaid bills — and health insurance companies that use long lists of in-network doctors who turn out not to accept patients’ insurance.But business advocates worry it’ll create an unintended burden on small businesses, citing a study claiming “excess tort costs” already saddle New Yorkers with $61.8 billion in unnecessary legal bills.Ashley Ranslow, New York state director for the National Federation of Independent Businesses, said Ja...