NYC’s Proposed POWER Act Would Open New Front for Business Litigation

If you operate a business in New York City that offers financing or handles consumer transactions, a proposed law called the POWER Act could significantly increase your legal risk. Currently, the New York Attorney General is primarily responsible for enforcing consumer protection laws. This new bill would change that by giving individual consumers the right to sue businesses directly for 'unfair, deceptive, or abusive' acts. This is known as a private right of action, and it often leads to a surge in class-action lawsuits. For retailers and service providers, this means your sales scripts, financing disclosures, and collection practices will be under a microscope. Even if a government agency hasn't flagged your business, a single disgruntled customer or an opportunistic law firm could drag you into court. The bill aims to reach beyond just traditional banks to cover almost all areas of trade and commerce. This includes the way you market Buy Now, Pay Later (BNPL) options or in-house credit programs. The 'abusive' standard is particularly tricky because it can be interpreted broadly to include any practice that takes advantage of a consumer's lack of understanding. If this passes, the cost of doing business in NYC will likely rise due to increased compliance needs and higher insurance premiums.

Source: PYMNTS

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