Ever since my days as a City Court Judge sitting in the Small Claims Part ^[i] I have kept track of reported consumer law cases in New York State Courts. Causes of action alleging the violation of one or more Federal and/or New York State consumer protection statutes are frequently asserted in civil cases^[ii]. This Paper, prepared annually for New York State Civil Court Judges and the Town & Village Courts Resource Center discusses those consumer protection statutes most frequently used in New York State courts.

The Methodology Of This Paper

This Paper reports on recent consumer law cases in New York State Small Claims Courts, City Courts, District Courts, Civil Courts and Supreme Courts and categorizes them by the New York State or Federal consumer protection statutes invoked. For example, the most popular consumer protection statute is New York State General Business Law § 349 [ G.B.L § 349 ] which prohibits deceptive and misleading business practices. Under this category there is a description of cases, by type of product or service involved, which have successfully invoked G.B.L. § 349. Other consumer protection statutes are described within the context of product and service categories such as Cars and Loans and Credit. There also tables of both New York State and Federal consumer protection statutes.

Consumer Crisis: Credit Card Debt & Mortgage Foreclosures

Last year we noted the avalanche of credit card default cases being brought in New York State and the extraordinary response of our Civil Courts^[iii]. A recent study^[iv] by the Urban Justice Center discussed “ the explosion of consumer debt cases in the New York City Civil Court in recent years. Approximately, 320,000 consumer debt cases were filed in 2006, leading to almost $800 million in judgments. The report notes that this is more filings than all the civil and criminal cases in U.S. District Courts...findings of the report include (1) The defendant failed to appear in 93.3% of the cases, (2) 80% of cases result in default judgments, (3) Even when defendants appear, they were virtually never represented by counsel, (4) Almost 90% of cases are brought by debt buyers “^[v].

Home foreclosures have increased dramatically leading New York State Court of Appeals Chief Justice Kaye to note that “ Since January 2005, foreclosure filings have increased 150 percent statewide and filing are expected to rise at least an additional 40 percent in 2008 “ and to announce a residential foreclosure program to “ help ensure that homeowners are aware of available legal service providers and mortgage counselors who can help them avoid unnecessary foreclosures and reach-of-court resolutions “^[vi].

In addition, the Courts have responded, particularly, in the area of standing [ see Recent Standing Decisions from New York, NCLC Reports, Bankruptcy and Foreclosures Edition, Vol. 26, March/April 2008, p. 19 ( “ In a series of recent decisions several New York courts^[vii] either denied summary judgment or refused to grant motions for default to plaintiffs who provided the courts with clearly inadequate proof of their standing to foreclose “ ) and in applying New York State’s predatory lending and “ high-cost home loan “ statute as an affirmative defense in foreclosure proceedings^[viii].

Consumer Class Actions Too

        Article 9 of the C.P.L.R.^[ix] allows consumers to aggregate similar claims into class actions. The fact patterns in such class actions often provide useful information on new areas of consumer law. The scope of New York State class actions^[x] and a review of all New York State class actions reported between January 2005 to January 2008 appears herein.

Table Of Contents

1] Table of N.Y.S. Consumer Protection Statutes

2] Table of Federal Consumer Protection Statutes

2.1] Recent New York State Consumer Law Articles

3] Deceptive and Misleading Business Practices

[A] History & Philosophy

[B] Consumer Oriented Conduct

[C] Stating A Cognizable Claim

[D] Preemption

[E] Actual Injury Necessary

[F] Threshold Of Deception

[G] Scope Of G.B.L. § 349

[H] Statute Of Limitations

[I] Application To Non-Residents

[J] No Independent Claim Necessary

[K] Territorial Limitations

[L] Types Of Goods & Services Covered By G.B.L. § 349

1] Apartment Rentals

2] Attorney Advertising

3] Aupair Services

4-5] Auctions: Bid Rigging

6] Automotive: Failure To Disclose Contract Terms

6.1] Automotive: Repair Shop Labor Charges

6.2] Automotive: Improper Billings For Services

6.3] Automotive: Defective Ignition Switches

6.4] Automotive: Defective Brake Shoes

6.5] Automotive: Motor Oil Changes

6.6] Automotive: Extended Warranties

6.7] Automotive: Refusal To Pay Arbitrator’s Award

6.8] Baldness Products

7] Budget Planning                                            

8] Cable TV: Charging For Unneeded Converter Boxes

8.1] Cable TV: Imposition Of Unauthorized Taxes

9] Cell Phones

9.1] Checking Accounts

    10] Clothing Sales

    11] Computer Software

    12] Credit Cards

    13] Currency Conversion

    14] Customer Information

    14.1] Debt Collection Practices            

    15] Defective Dishwashers

    16] Door-To-Door Sales

    17] Educational Services

    17.1] Electricity Rates

    18] Employee Scholarship Programs         

    19] Excessive & Unlawful Bail Bond Fees

    19.1] Excessive Modeling Fees

    20] Exhibitions & Conferences

    20.1] Extended Warranties

    20.2] Food: Nutritional Value

    20.3] Food: Expiration Dates

    21] Furniture Sales

    21.1] Guitars

    22] Hair Loss Treatment

    23] Home Heating Oil Price Increases

    24] Home Inspections

    25] In Vitro Fertilizations

    26] Insurance Coverage & Rates

    26.1] Insurance Claims Procedures

    27] Internet Marketing & Services

    28] “ Knock-Off “ Telephone Numbers

    29] Lasik Eye Surgery

    29.1] Layaway Plans

    29.2] Leases, Equipment

    30] Liquidated Damages Clause

    31] Loan Applications

    32] Mislabeling

    32.1] Monopolistic Business Practices

    33] Mortgages: Improper Fees & Charges

    34] Mortgages & Home Equity Loans: Closings

    35] Movers, Household Goods

    35.1] Packaging

    36] Professional Networking

    37] Privacy Invasion

    38] Pyramid Schemes

    39] Real Estate Sales

    40] Securities

    41] Sports Nutrition Products

    41.1] Suing Twice On Same Claim

    41.2] Tax Advice

    41.3] Taxes: Wrongfully Collected

    42] Termite Inspections

    43] Tobacco Products

    44] Transportation Services, E-Z Passes

    45] Travel Services

    45.1] Tummy Tighteners

    46] TV Repair Shops

         46.1] Unfair Competition Claims

    47] Wedding Singers

4] False Advertising

[A] Unlawful Use Of Name Of Nonprofit Organization

5] Cars, Cars, Cars

[A] Automotive Parts Warranty

[B] Automotive Repair Shop Duties

[C] Implied Warranty of Merchantability & Non-Conforming Goods

[D] Magnuson-Moss Warranty Act & Leased Vehicles

[E] New Car Contract Disclosure Rule

[F] New Car Lemon Law

[F.1] Used Cars

[G] Used Car Dealer Licensing

[H] Used Car Extended Warranty

[I] Used Car Lemon Law

[J] Warranty Of Serviceability

[K] Repossession & Sale of Vehicle

[L] Wrecked Cars

[M] Inspection Stations

5.1] Educational Services

6] Houses, Apartments & Coops

[A] Home Improvement Frauds

[A.1] Home Inspections

[B] Home Improvement Contractor Licensing

[C] New Home Implied Warranty Of Merchantability

[D] Movers, Household Goods

[E] Real Estate Broker Licenses

[F] Arbitration Agreements

[G] Real Property Condition Disclosure

[H] Real Property Warranty Of Habitability

[I] Multiple Dwelling Law

7] Insurance

[A] Coverage & Rates

[B] Claims Procedures

8] Mortgages, Credit Cards and Loans

    [A] Fair Credit Reporting

[B] Home Ownership and Equity Protection

[C] Real Estate Settlements

[D] Regulation Z

[E] Truth In Lending

[E.1] Preemption Of State Law Claims

[F] Mortgage Related Documents; Fees

[F.1] Electronic Fund Transfer Act

[F.2] Predatory Lending Practices

[G] Credit Card Cases: Standards Of Proof

[H] Identity Theft

[I] Debt Collection Practices

[J]  Fair Debt Collective Practices Act

9] Overcoats Lost At Restaurants

10] Pyramid Schemes

11] Retail Sales & Leases

     [A] Consumer Transaction Documents, Type Size

[A.1] Dating Services

[B] Dog And Cat Sales

[C] Door To Door Sales

[C.1] Furniture Extended Warranties

[C.2] Health Clubs

[D] Lease Renewals

[E] Licensing To Do Business

[1] Home Improvement Contractors

[2] Used Car Dealers

[3] Debt Collectors

[4] Other Licensed Businesses

[E.1] Massage Therapy

[F] Merchandise Delivery Dates

[F.1] Merchandise Layaway Plans

[F.2] Price Gouging

[G] Refund Policies

[G.1] Retail Installment Sales

[H] Rental Purchase Agreements

[I] Warranty Of Merchantability

[J] Travel Services

12] Telemarketing      

[A] Federal Telephone Consumer Protection Act

     [B] N.Y.S. Telemarketing And Consumer Fraud And Abuse Prevention Act

     [C] Telemarketing Devices Restrictions

     [D] Telemarketing Sales Call Registry

13] Litigation Issues

     [A] Mandatory Arbitration Clauses

[B] Credit Card Defaults & Mortgage Foreclosures

[C] Forum Selection Clauses

[D] Tariffs; Filed Rate Doctrine

[E] Consumer Class Actions

[F] Reported Class Action Cases: 1/1/2005 - 12/31/2005

1] “ Risk Free “ Insurance

2] Monopolistic Business Practices

3] Forum Shopping: G.B.L. 340 In Federal Court

4] Fruity Booty Settlement Rejected

5] Listerine As Effective As Floss?

6] Cable TV

7] Illegal Telephone “ Slamming “

8] Rental Cars

9] Document Preparation Fees

10] Tax Assessments

11] Arbitration Clauses & Class Actions

12] Vanishing Premiums

13] Labor Disputes

14] Retiree Benefits

15] Mortgages

16] Tenants

17] Document Preservation

18] Shareholder’s Suit

19] Corporate Merger

20] Partnership Dispute

21] Notice Issues

21.1] Insurance Dividends

22] Telephone Consumer Protection Act

23] Residential Electricity Contracts

24] Oil & Gas Royalty Payments

25] Street Vendors Unite

26] Inmates

27] Legal Aliens

28] Shelter Allowances

G] Reported Class Action Cases: 1/1/2006 - 21/31/2006   

1] Forum Selection Clause Enforced

2] Insurance Dividends

3] Water & Sewer Customers

4] Donnelly Act

5] Telephone Consumer Protection Act

6] Photocopying Costs

7] Tobacco Master Settlement Agreement

8] Outdoor World Settlement

9] Counterfeit Drugs

10] DHL Processing Fees

11] Spraypark Mass Tort

12] Spanish Yellow Pages

13] Demutualization Plan Challenged

14] Stock Exchange Merger

15] Digital Mobile Communications

16] Group Life Insurance Benefits

17] Wage Claims

18] Mortgage Pay-Offs

19] Retiree Benefits

20] Attorneys Fees

21] Electric Rate Overcharges

22] Medical Necessity

H] Reported Class Action Cases : 1/1/2007 - 12/31/2007

1] Donnelly Act

2] Fruity Booty Settlement Revisited

3] Craftsman Tools

4] Drug Misbranding

5] Snapple Distributors

6] Cellular Telephones

7] Cablevision Taxes & Fees

8] Mortgages: Document Preparation Fees

9] Mortgages: Yield Spread Premiums

10] Mortgages: Payoff Statement Fees

11] DHL Processing Fees

12] Equipment Leases

13] Health Insurance

14] Life Insurance

15] Wrecked Cars

16] Employees: Wages & Overtime

17] Employees: Davis-Bacon Act

18] Undocumented Aliens: Wage Claims

19] Lien Law Class Actions

20] Investments/Securities

21] Publishing Legal Notices

22] Constitutional Rights

23] Disclosure of Class Counsel’s Files

24] Vendors: Charge Backs & Late Payments

1] Table Of New York State Consumer Protection Statutes

[A] Banking Law 6-l [ Predatory Lending Practices; High-Cost Home Loans ];

[A.1] G.B.L. § 349 [ Deceptive & Misleading Business Practices ];

[B] G.B.L. § 350 [ False Advertising ];

[B-1] G.B.L. Article 29-H [ Improper Debt Collection ];

[C] G.B.L. § 198-a [ New Car Lemon Law ];

[D] G.B.L. § 198-b [ Used Car Lemon Law ];

[E] G.B.L. § 201 [ Overcoats Lost At Restaurants ];

[F] G.B.L. § 218-a [ Retail Refund Policies ];

[G] G.B.L. § 359-fff [ Pyramid Schemes ];

[G.1] G.B.L. §§ 380-s, 380-l [ Identity Theft ];

[G.2] G.B.L. § 394-c [ Dating Services ];

[G.3] G.B.L. § 396-aa [ Unsolicited Telefacsimile Advertising ];

[H] G.B.L. § 396-p(5) [ New Car Purchase Contract Disclosure Requirements ];

[H.1] G.B.L. § 396-q [ New Cars; Sales & Leases ];

[H.2] G.B.L. § 396-t [ Merchandise Layaway Plans ];

[I] G.B.L. § 396-u [ Merchandise Delivery Dates ];

[I.1] G.B.L. § 397 [ Unlawful Use Of Name Of Nonprofit Organization ];

[I.2] G.B.L. § 399-c [ Mandatory Arbitration Clauses In Certain Consumer Contracts Prohibited ];

[J] G.B.L. § 399-p [ Restrictions On Automated Telemarketing Devices ];

[K] G.B.L. § 399-pp [ Telemarketing And Consumer Fraud And Abuse Prevention Act ];

[L] G.B.L. § 399-z [ No Telemarketing Sales Call Registry ];

[L.1] G.B.L. § 601 [ Debt Collection Practices ];  

[M] G.B.L. § 617(2)(a) [ New Parts Warranties ];

[M.1] G.B.L. §§ 620 et seq [ Health Club Services ];

[N] G.B.L. §§ 752 et seq [ Sale Of Dogs And Cats ];

[O] G.B.L. §§ 771, 772 [ Home Improvement Contracts & Frauds ];

[O.1] G.B.L. § 777 [ New Home Implied Warranty Of Merchantability ];

[O.2] G.B.L. § 820 [ Sale Of Outdated Over The Counter Drugs ];

[P] C.P.L.R. § 3015(e) [ Licensing To Do Business ];

[Q] C.P.L.R. § 4544 [ Consumer Transaction Documents Must Be In 8 Point Type ];

[R] M.D.L. § 78 [ Duty To Keep Premises In Good Repair ];

[R.1] P.P.L. § 302 [ retail Installment Sales ];

[R.2] P.P.L. § 401 et seq. [ Retail Installment Sales Act ];

[S] P.P.L. §§ 425 et seq [ Door-To-Door Sales ];

[T] P.P.L. §§ 500 et seq [ Rental Purchase Agreements ];

[U] R.P.L. § 235-b [ Warranty Of Habitability ];

[V] R.P.L. § 274-a(2)(a) [ Mortgage Related Fees ];

[V.1] R.P.L. § 441(b) [ Real Estate Broker Licenses ];

[W] R.P.L. § 462 [ Property Condition Disclosure Act ];

[W.1] U.C.C. § 2-207(2)(B) [ Additional Contract Terms ];

[X] U.C.C. §§ 2-314, 2-318 [ Warranty Of Merchantability ];

[Y] U.C.C. § 2-601 [ Nonconforming Goods; Right of Rescission ];

[Y.1] U.C.C. § 2-608 [ Delivery of Non-Conforming Goods ];

[Y.2] U.C.C. §§ 610, 611 [ Repossession & Sale Of Vehicle ];

[Z] V.T.L. § 417 [ Warranty Of Serviceability ];

[AA] 17 N.Y.C.R.R. § 814.7 [ Duties & Rights of Movers of Household Goods ];

[BB] Education Law § 6512(1) [ Massage Therapy ];

[CC] G.O.L. § 5-901 [ Limitations On Enforceability Of Automatic Lease Renewal Provisions ].

2] Table Of Federal Consumer Protection Statutes

[A] 12 U.S.C. § 2601 [ Real Estate Settlement Procedures Act ( RESPA ) ];

[B] 15 U.S.C. §§ 1601 et seq [ Truth In Lending Act ];

[C] 15 U.S.C. § 1639 [ Home Ownerships and Equity Protection Act of 1994 ( HOEPA )];

[C-1] 15 U.S.C. §§ 1692e, 1969k [ Fair Debt Collection Practices Act ];

[C-2] 15 U.S.C. § 1693f [ Electronic Fund Transfer Act ];

[D] 15 U.S.C. §§ 2301 et seq [ Magnuson-Moss Warranty Act ];

[E] 47 U.S.C. § 227 [ Federal Telephone Consumer Protection Act Of 1991 ];

[F] 12 C.F.R. §§ 226.1 et seq [ Regulation Z ].

2.1] Recent Consumer Law Articles

Dickerson & Manning, Summary of Article 9 Class Actions in 2006, New York Law Journal, January 24, 2007, p. 4.

Dickerson, The Modern Cruise Passenger’s Rights and Remedies Part I, New York State Bar Association Journal, Vol. 79, No. 3

( March/April 2007 ), p. 10.

Dickerson, False, Misleading and Deceptive Advertising In The Travel Industry [ 2007 ] International Travel Law Journal 90.

Dickerson, The Modern Cruise Passenger’s Rights & Remedies-Part II, New York State Bar Association Journal, Vol. 79, No. 5( June 2007 ), p. 18.

Dickerson, Consumer Protection Law 2007: Guide to Statutes, New York Law Journal, July 25, 2007, p. 4.

Dickerson & Manning, Class Actions Under CPLR Art. 9 in 2007, New York Law Journal, January 18, 2008, p. 4.

Dickerson, New York State Consumer Protection Law and Class Actions in 2007- Part I, Vol. 80, No. 2, New York State Bar Association Journal, February 2008, 42.

Dickerson, New York State Consumer Protection Law and Class Actions-Part II, Vol. 80, No. 4, New York State Bar Association Journal, May 2008, p. 39.

Dickerson, Travel Abroad, Sue At Home, New York Law Journal, June 11, 2008, p. 4.

Morgenson, Illinois to Sue Countrywide, New York Times, nytimes.com, June 25, 2008 ( “ The Illinois attorney general is suing Countrywide Financial, the troubled mortgage lender... contending that the company and its executives defrauded borrowers in the state by selling them costly and defective loans that quickly went into foreclosure...accused Countrywide...of relaxing underwriting standards, structuring loans with risky features and misleading consumers with hidden fees and fake marketing claims, like its heavily advertised ‘ no closing costs loan ‘” ).

Debt Weight: The Consumer Credit Crisis in New York City and Its Impact on the Working Poor available at www.urbanjustice.org/cdp                                                                  

News & Trends, Rebate ripoffs spark consumer lawsuits, new legislation, Trial November 2007. P. 14 ( discussing limited value of some rebate programs ). See e.g., Faigman v. AT&T Mobility LLC, 2007 WL 2088561 ( N.D. Cal. 2007 )( “ Plaintiffs are California residents who claim that they were mislead into purchasing mobile phones and service contracts from Cingular as a result of a misleading rebate program...Plaintiffs claim that Cingular’s practice of marketing its rebates as directly reducing the cost of Cingular cell phones by the dollar amount of the rebate is misleading because the VISA Rewards Cards do not reduce the cost of Cingular phones by the value of the rebate. The cards are less valuable than cash or check, according to plaintiffs, due to the limitations and restrictions placed upon the cards...Plaintiffs identify the following restrictions which are not disclosed in Cingular’s advertisements: the cards must be activated, the cards are only accepted at certain locations, the cards can incur service charges, the cards will be declined in transactions that exceed the balance of the card, the cards expire, the cards are not redeemable for cash, the cards do not earn interest, the cards are not divisible, the cards are not transferable and the cards are issued in maximum increments of $50 “.

Points Mania, Consumer Reports, July 2008, p. 12 ( “ With just about every retailer and credit-card issuer offering a rewards program, you might wonder which, if any, are worth the bother. The answer: Not many “ ).

Extended warranties: A high priced gamble, Consumer Reports, April 2008, p. 26 ( “ Our survey of 8,000 new-car buyers shows they are usually a poor deal “ ).

Best & Worst Credit Cards, Consumer Reports, October 2007, p. 12 ( “ Credit cards might look pretty much alike, but our new survey shows vast differences in how pleased people are with their plastic. And we’re not just talking about interest rates, which vary widely from one card to another “ ).

Banks, Contract Law, Scope of Forum Selection: ‘Phillips v. Audio Active‘, New York Law Journal, September 17, 2007, p. 3.

Confessore & Kershaw, As Home Health Care Industry Booms, Little Oversight to Counter Fraud, The New York Times, Metro Section, September 2, 2007, p. 1 ( “ It is one of New York’s fastest growing industries, driven by government policy and nourished by tax dollars. But as the home health care industry has expanded, the state appears to have been a step behind, with a confusing hodgepodge of regulations and agencies to police it, experts and state officials say “ ).

Schepp, Rules are few on product dating, Journal News, January 20, 2008, p. 1 ( “ Federal, state laws do little to stop the sale of outdated food items “ ).

Cuomo to sue Rite Aid, CVS, Journal News, June 13, 2008, p. 1 ( “ State Attorney General Andrew Cuomo plans to sue Rite Aid and CVS, claiming they sell expired products-including milk, eggs, medicines and baby formula-at stores across New York “ ).

Drury, Kmart fined $1.5M over price tags, Journal News, April 2, 2008, p. 1 ( “ An Administrative law judge has ordered giant retailer Kmart to pay a $1.56 million fine after Westchester County inspectors found more than 1,500 items at stores in Yorktown and Greenburgh that did not have price tags “ ).

Seven Ways to Challenge a Foreclosure on Standing Grounds, NCLC Reports, Bankruptcy and Foreclosures Edition, Vo. 26, March/April 2008, p. 1.

Twelve Reasons to Love the Magnuson-Moss Warranty Act, NCLC Reports, Deceptive Practices and Warranties Edition, Vol. 26, January/February 2008, p. 1.

Thirteen Ways to Use Other Parties’ Misconduct to Defend a Foreclosure, NCLC Reports, Deceptive Practices and Warranties Edition, Vo. 26, November/December 2007.

3] Deceptive & Misleading Business Practices: G.B.L. § 349  

The most popular of New York State’s many consumer protection statutes is General Business Law § 349 [ “ G.B.L. § 349 “ ] which prohibits deceptive and misleading business practices^[xi]. G.B.L. § 349 allows consumers and, possibly, businesses^[xii] to sue for $50.00 or actual damages which may be trebled up to $1,000.00 upon a finding of a “ wil(ful) or know(ing) violat(ion) “.^[xiii] An additional civil penalty not to exceed $10,000 may be imposed for a violation if the “ conduct is perpetrated against one or more elderly persons “^[xiv]. Attorneys fees and costs may be recovered as well.

A] History & Philosophy

As stated by Justice Graffeo in the dissenting opinion in Matter of Food Parade, Inc. v. Office of Consumer Affairs^[xv],

 “ This Court has broadly construed general consumer protection laws to effectuate their remedial purposes, applying the state deceptive practices law to a full spectrum of consumer-oriented conduct, from the sale of ‘ vanishing premium ‘ life insurance policies...to the provision of infertility services...We have repeatedly emphasized that ( G.B.L. § 349 ) and section 350, its companion...’ apply to virtually all economic activity, and their application has been correspondingly broad...The reach of these statutes provide[s] needed authority to cope with the numerous, ever-changing types of false and deceptive business practices which plague consumers in our State ‘...In determining what types of conduct may be deceptive practices under state law, this Court has applied an objective standard which asks whether the ‘ representation or omission [ was ] likely to mislead a reasonable consumer acting reasonably under the circumstances ‘...taking into account not only the impact on the ‘ average consumer ‘ but also on ‘ the vast multitude which the statutes were enacted to safeguard-including the ig