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New Jersey Unfair or Deceptive Act or Practice Laws

Some Consumer Protection Laws in New Jersey

New Jersey Statutes Annotated § 56:8:

What is it?

New Jersey Statutes Annotated § 56:8, also known as the New Jersey Consumer Fraud Act (“CFA”), contains the consumer protection regulations that govern the conduct of businesses in the state of New Jersey. The CFA prohibits businesses from using deceptive practices during the sales of goods or services, including the sale of real estate. In comparison to consumer protection laws in other states, the CFA is especially strong and offers many rights to consumers. The CFA gives both the Attorney General and private parties the opportunity to take legal action against businesses that act in violation of this law. The law also gives the Attorney General the authority to make rules or carry out other actions in order to accomplish the objectives of the law.

The CFA provides a definition for consumer fraud that broadly prohibits a multitude of deceptive or unfair and unconscionable acts. Because the language of the CFA is so expansive, most transactions are covered by this law including fraud in sales, financial transactions, and contracts. Some examples of CFA violations can include lying about the terms of a warranty, using “Bait and Switch” advertising, or misrepresenting the price of a good or service. Under the CFA, consumer frauds can be categorized as affirmative misrepresentations, meaning that the business makes an untrue statement; knowing omissions, meaning that the business knowingly excludes factual information; or violations of specific consumer protection, meaning that the business violated a specific law within a variety of commercial endeavors.

The CFA contains specific regulations that businesses within particular industries like auto, health clubs, and home improvement must abide by. Those businesses that do not comply with these specific laws may be held accountable for consumer fraud. For example, in the auto industry, there are many specific rules that auto dealers must follow. Some actions that are prohibited by the CFA include lying about the terms of financing or about the vehicle’s warranty, misrepresenting the condition or price of the vehicle, tampering with the odometer or switching the VIN, or selling a vehicle that is damaged or non-functional. In the health club industry, there are many CFA regulations that pertain to health club contracts. For example, among other rules, health club contracts must be shorter than three years, must provide the consumer with the ability to cancel within three days of signing up, and must allow for cancellation under certain conditions such as death, permanent disability, or relocation. 

The CFA also specifies regulations that govern home improvement contractors. These regulations include requirements that must be contained in home improvement contracts such as the start and stop dates, a description of the oncoming work, any warranties, and the total price of the project. Other regulations include acts that contractors are prohibited for doing such as asking for payment before the job is finished or providing consumers with misleading information regarding the work. Aside from these three industries, there are other industries that are specified in the CFA. Some of these industries include telemarketers, internet dating agencies, and information services.  The section of the CFA that applies to telemarketers is often referred to as the New Jersey “Do Not Call” Law, which states that telemarketers cannot call a person if the person is on the national “Do Not Call” registry; that they also cannot call a person between the hours of 9 p.m. and 8 a.m.; and that they also cannot intentionally block their caller identification; amongst other things.

Who does the law apply to and how can consumers sue?

The law applies to all businesses who have engaged in consumer fraud and deceptive practices during the sale of goods or services. Under the CFA, businesses can also be considered to be consumers, so the act also applies to business to business sales. The CFA also allows for the filing of class action lawsuits.

Before filing a complaint, the consumer does not have to provide the defendant with a pre-suit notice or seek a refund from them. The consumer also does not have to provide a showing of reliance.

A consumer can successfully sue a business under the CFA by proving that the business engaged in an unlawful act or practice that violated the CFA, that they suffered an ascertainable loss, and that there is a causal relationship between the loss and the consumer fraud — that is, that the loss the consumer suffered was a result of the business’ act of consumer fraud. Additionally, while an ascertainable loss does not necessarily have to mean an out-of-pocket loss, it must be quantifiable and measurable.

What damages are consumers entitled to?

If a consumer is successful with their lawsuit, they can have the opportunity to collect up to three times the amount of damages that were sustained. Additionally, the business may also be responsible for paying the consumer’s attorney’s fees and any other costs.

Additionally, if a business has unlawfully acquired money or property from senior citizens, the senior citizens are entitled to receiving twice the amount or value of the money or property that was taken from them through unlawful means.

Do businesses have to pay a civil penalty?

Yes. If a business violates the CFA, they must pay a civil penalty of up to $10,000 for the first offense and up to $20,000 for any offenses after that.

What is the statute of limitations?

Under the CFA, the statute of limitations for a claim is six years from the date that the alleged damage was suffered.

Are there exemptions?

The CFA does not apply to “learned professionals” such as doctors, lawyers, or engineers that are operating within their professional areas.

The statute of limitations period for debt in New Jersey:

In New Jersey, the statute of limitations period for most types of debt is six years. This means that a creditor generally cannot sue a consumer for nonpayment of a debt if it is more than six years overdue. That said, different types of debt have different statute of limitations periods, and the statute of limitations period in New Jersey for auto loan debt is four years, for credit card debt it is six years, for medical debt it is six years, and for mortgage debt it is twenty years. If a consumer promises to make a payment on the alleged debt, or makes even a small payment, it could potentially restart the clock on the statute of limitations.

Some of the places that a consumer can look to for help or answers to questions:

The laws and statutes discussed above can change. So, in the state that a consumer resides in, a consumer protection agency, the Office of the Attorney General, and/or a consumer protection attorney who is licensed in a consumer’s respective state can help a consumer in getting help, up to date information and interpretations, and/or with determining the answers to their questions in regard to the aforementioned laws. The Consumer Financial Protection Bureau can assist as well.