Statutory Fraud Claims Under the Deceptive Practices Act

In New York, you can bring statutory fraud claims under the Deceptive Practices Act. You can file a claim for a deceptive practice or act under section 349 of the New York General Business Law. The law can be applied broadly to many different types of economic activity. However, you may also have a claim under section 350, which prohibits false advertising. The state attorney general can bring an enforcement action under the Deceptive Practices Act, but the statute also gives you the right to sue the business that is engaging in fraud to enjoin the deceptive acts or practices or recover actual damages. At The Linden Law Group, P.C., our New York City consumer fraud lawyers may be able to help you with bringing this type of claim.

Both consumers and corporate competitors can sue under General Business Law section 349. This law is a broadly construed law designed to put consumers on the same footing as businesses, which are usually in a more powerful position. As a plaintiff, you will need to prove that the defendant engaged in a materially deceptive practice or act, the practice or act was consumer-oriented, and the consumer was injured due to the deceptive practice or act. Practices or acts are considered materially deceptive when they are likely to affect a consumer's selection of goods or actions related to goods. Courts have found that practices and actions are consumer-oriented enough if they are standard practices or actions that potentially affect consumers who are similarly situated. The injury needs to be actual, but it does not need to be economic.

Generally, section 349 provides a lower bar for a plaintiff’s attorney to meet than common law fraudulent misrepresentation claims or claims under section 350, which controls deceptive ads and product labels. While mildly inflated claims — "puffery" — by a defendant are not actionable, the actions do not need to be as egregious as outright fraud to be the subject of a lawsuit.

The remedies that you may recover under section 349 include injunctive relief or the recovery of actual damages. If the violation of the Deceptive Practices Act was willful or knowing, the court can award damages of three times the actual damages, with a cap of $1,000.

Defenses that may be raised against section 349 include a statute of limitations bar, an argument that the act or practice did not actually injure you, or an argument that the act was not actually misleading. A defendant may also raise the defense that the act or practice complied with the Federal Trade Commission's rules and regulations, or the rules and regulations of another federal government agency that covers the business practice that is at issue.

Under section 350, by contrast, you will need to prove that the advertisement was consumer-oriented, the ad was misleading in a material way, you were harmed, and you relied on the misleading ad. This is slightly harder to prove than a section 349 claim because you must show that you relied on the deception, and reliance is not presumed if you had a reasonable opportunity to learn facts about a transaction in advance by using ordinary intelligence or if multiple factors could have influenced you. Under section 350, advertising includes product labeling and packaging.

If you are a consumer or corporate competitor who suffers harm due to a business' deceptive practices or acts, you should hold the responsible business or individual accountable. The Linden Law Group, P.C. represents people bringing statutory fraud claims under the Deceptive Practices Act in Queens, Manhattan, Brooklyn, the Bronx, and Staten Island — all five boroughs of New York City. We also represent clients in Nassau and Suffolk Counties. Contact us at (212) 537-6612 or via our online form. Sue to recover your damages — our firm fights fraud and scams head-on.