Navigating New York Department of Consumer Affairs Investigations and Administrative Hearings

The New York City Department of Consumer Affairs is a municipal consumer protection agency that licenses businesses, mediates consumer complaints and endeavors to protect consumers from deceptive practices through its subpoena power and regulatory investigations. 

Time is of the essence if you have received notice that your company is the subject of a DCA investigation or if a consumer has filed a complaint against your business, resulting in the receipt of a Notice of Hearing to appear in front of a DCA Administrative Tribunal.  Although both scenarios must be taken seriously, do not panic.  A NYC DCA attorney with experience defending and favorably resolving a wide variety of DCA investigations on behalf of New York based businesses will often be able to quickly, quietly and amicably resolve Departmental investigations and allegations, as well as consumer oriented complaints.

In conjunction with Departmental investigations, the DCA will identify the practices that it is investigating and what rules may have been violated.  Upon being notified that your business is the target of an investigation you must act quickly.  Failing to act diligently from the beginning could prejudice your company’s ability to effectively respond and negatively impact continued business operations.

The clock may be ticking so promptly contact a Department of Consumer Affairs defense lawyer in order to evaluate what staff attorneys have been assigned to the investigation and assess its overall scope.  The design and implementation of a response plan should be a top priority.

While the DCA does not tend to freely dole out extensions, experienced counsel may be able to secure additional time within which to prepare and submit a persuasive initial written response, and narrow the scope of the information being sought  The manner in which your company response to a Departmental investigation may very influence whether the matter is resolved and closed favorably, or if it is escalated into an enforcement proceeding.  

Navigating a Departmental investigation requires tactical experience and strong working relationships with DCA staff. 

The purpose of an Administrative Tribunal Hearing is to give business owners an opportunity to appear before a fair and impartial Administrative Law Judge and present a defense to the charge(s) set forth in the Notice of Hearing.  The ALJ will hear testimony and take evidence from the consumer, from a DCA representative, and you and your witnesses.

As is the case with Departmental investigations, the failure to act swiftly upon your receipt of a Notice of Hearing may negatively impact the defense of your matter.  Depending upon the nature of the relevant consumer and/or Departmental allegations, an adjournment of the hearing date may need to be secured while the legitimacy of the claims is assessed.  Such requests must be submitted timely and supported by the reasons justifying a new  hearing date.

If your business receives a violation for unlicensed activity, you should stop the unlicensed activity immediately.  In fact, your failure to do so could result in a fine for each day that your business has operated without the appropriate license.

Consult a New York Department of Consumer Affairs defense lawyer immediately upon receiving a Notice of Hearing to assist you with evaluating the relevant laws and rules that you are charged with violating, reviewing the facts of your case, organizing relevant evidence for presentation to the ALJ and considering potential evidentiary issues. 

All documents and witnesses that can potentially assist with your defense should be brought to the hearing.  Documents may include, without limitation, contracts, written communications, receipts, photographs, licenses, business records and checks.  Note that both you (the business) and the opposing party have the right to serve pre-hearing discovery requests — written demands for copies of the documents and names of the witnesses that will be brought to the hearing.

Although not required, you may choose to bring a defense attorney with you to the hearing.  Take into account that post-hearing briefs may be permitted on specific issues of fact or law when weighing whether to have your attorney present.  

If you do not appear on the scheduled hearing date, a default decision may be issued in which you will be found guilty of the charge(s), you will be ordered to pay a fine for each charge and you may be ordered to pay an additional fine for failing to appear.  In addition, your license may be suspended or revoked.

If the charges detailed in the Notice of Violation are settled by mutual agreement of the parties prior to the scheduled hearing date, the terms of the settlement must be filed, in writing, with any stipulations or other writings required by the terms of the settlement prior to the scheduled hearing date.

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Minimizing the risk of ever being the subject of a DCA investigation or enforcement proceeding requires preventative compliance measures.

The foregoing should be of interest to any company or individual that is the subject of a NYC Department of Consumer Affairs regulatory investigation or enforcement proceeding.  If you require such assistance, or if you would like to discuss the avoidance of related triggers, please contact Richard B. Newman at rnewman@hinchnewman.com.

Information conveyed in this article is provided for preliminary informational purposes only and does not constitute, nor should it be relied upon, as legal advice. No person should act or rely on any information in this article without seeking the advice of an attorney regarding how best to respond to the New York Department of Consumer Affairs.