May 30, 2009

Is ther Individual Liability for Consumer Fraud?

The New Jersey Consumer Fraud Act and individual liability.

The definitional section of the New Jersey Consumer Fraud Act is straightforward. The Act to persons. The New Jersey Supreme Court has explained that the Act is wide ranging remedial legislation and should be liberally interpreted to effectuate its remedial purposes. Despite the plain language of the statute and the express statements made by the New Jersey Supreme Court, there have been various businesses and/or individuals have argued that the New Jersey Consumer Fraud Act did not apply to them. There are some exceptions to the application of the New Jersey Consumer Fraud Act, however, these exceptions are limited. Generally, lawyers, utilities and hospitals are exempt from the New Jersey Consumer Fraud Act. The primary reason that these particular businesses are exempt from the New Jersey Consumer Fraud Act is that they have their self-contained regulatory bodies. As an example, lawyers are regulated by the Supreme Court and not the Consumer Fraud Act.

There have been cases which have interpreted the seller’s of real estate, individual sellers, to be exempt from the wide ranging penalties of the New Jersey Consumer Fraud Act.
The New Jersey Supreme Court recently decided a case that held the definitional section of the Act is self-explanatory in that it applies to all persons. This means that if you individually sell a particular product, you will be subject to the provisions of the New Jersey Consumer Fraud Act if you are a person. A person could be an individual or a legal fiction such as a corporation. In Lyle Real v. Radir Wheels, Inc. and Richard Conklin, the individual defendant, Richard Conklin, argued that he was not subject to the penalties of the New Jersey Consumer Fraud Act and that he is exempt from liability. The Appellate Division dismissed the case but ultimately the Supreme Court held that since he is a person under the Act, he is subject to the restrictions of the New Jersey Consumer Fraud Act.

This interpretation of the New Jersey Consumer Fraud Act has wide ranging implications. I would estimate that the significant implication is with regard to the sale of real estate. If the seller of the home misrepresents immaterial fact or fails to advise the purchasers of a material fact with the intent to deceive, there would be liability under the New Jersey Consumer Fraud Act.

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April 9, 2009

CAR DEALERSHIP SELLS CAR TO TWO BLIND PEOPLE.

CAR DEALERSHIP SELLS CAR TO TWO BLIND PEOPLE.

This is not a joke. It is true.

The names will withheld until suit is filed BUT today I saw, possibly, the worst case in the many years that I have been doing this type of work.

Both of my clients are legally blind. The primary obligor and the cosigner. They do not even have a driver’s license nor are the permitted to drive. The dealership even got the car registered and insured. The customer was at the dealership with his cane and his glasses. When they told me the story it was hard to believe. They are both legally blind.

To make matters even worse the car is a mess. It looks like it was in a prior accident with a different hood and various parts are melted on the interior of the car. They were told the car had only one prior owner when it had two.

The following are the causes of action (theories of liability) against the dealer and/or the lender.

• Consumer Fraud-deceptive conduct. Cox v. Sears.
• Fraud
• Breach of contract
• Breach of good faith and fair dealings. Wilson v. Hess
• Revocation. Cuesta v. Classic
• Negligence
• Discrimination against disabled persons, the blind. Law against discrimination.
• Declaratory relief that the contract is void ab initio (from the beginning)

Continue reading "CAR DEALERSHIP SELLS CAR TO TWO BLIND PEOPLE." »

February 22, 2009

What is UDAP? What is Consumer Fraud?

What is UDAP?

Unfair and deceptive Practices Acts. The New Jersey Consumer Fraud Act would be considered a UDAP statute. The purpose is to assist consumers in battling fraud in the market place and provides several protections top consumers that are meant to encourage consumers to bring suit and attract competent lawyers to litigate the cases. The UDAP statutes include provisions for tripled damages, attorney fees and injunctive relief. The State AG's office is also permitted to bring suit under the Consumer Fraud Act.

The UDAP statutes vary significantly by State, with some providing more protection that others. There is a published report indicating the strength and weaknesses of all the statutes for all of the 50 states. The report indicates that Michigan and Rhode Island are the two weakest statutes because the courts have interpreted tham to cover almost no transactions.

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February 16, 2009

Consumer Fraud and Buying a Car

The fear of buying a car

Many people have a fear of having to go to a dealership and purchase or lease a car. There are so many pitfalls. How do you get answers to important questions? Where did the dealership get the car? What did they do to it to get it ready for sale? Did they really inspect the car and what did they find in that inspection? These are basic safety issues and concerns that need to be answered. It is very important to get accurate answers to these questions. There is almost no option except to trust the dealership. Remember that you are dealing with the salesman not the service department. Can you really get an accurate answer?

After these most basic questions are answered you still have to be concerned about the financing and the terms of the transaction for the purchase either lease or purchase. As an example what is the best interest rate available, what are the real terms of the financing? What are the products that are being packaged with the vehicle? What is GAP and what are the terms of the coverage? What is the real cost? You need to ask all of these questions and get answers in writing, if possible.

The best thing to do is get everything in writing and do you research as best you can. Do a CARFAX and also try to get you own financing? Ask a lot of questions to feel the salesman out and don’t get timid when you need a question answered or you are not sure.

There are many New Jersey cases that demonstrate examples of the type of conduct might be determined to be consumer fraud or auto fraud.(each case turns on its own set of facts)

Delany v. Garden State Auto Mall: The dealer sold products without full disclosure.

Romano v. Galaxy: Violation of Federal Odometer Law

Cuesta v. Classic: Odometer Roll Back

Sema v. Automall : Misrepresenting the vehicle as new when it was a demo


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January 24, 2009

State Sues Certain Sansone Dealerships

State sues certain Sansone dealerships

Complete story


Sansone Ford Lincoln Mercury
Sansone Dodge in Ocean Township
Sansone Chevrolet
Sansone's Route 1 Auto Mall in the Avenel section of Woodbridge

According to the story the Sansone Dealership failed to disclose the condition of the vehicles

The Ag's Office was quoted as saying

"There is no doubt that consumers would want to know and must be told about prior damage to, and fleet or rental use of, a vehicle that they are considering for purchase,"

To be fair to Sansone and the Ag's Office the law in each of these areas need to be addressed specific posts.

What are the laws on damage and disclosure?
What are the laws on Consumer Fraud?
How is the State lawsuit by AG different than a normal persons civil lawsuit?
What is a consent order and how does it affect Sansone Dealerships?

How can I get a copy of the complaint?


There is a presumption of innocence because the State has to prove a case like any other plaintiff and until proven these are only allegations are only that. I am certain the allegations are denied by the lawyers and the dealers involved. This is why we have trials to make these determinations of innocence or non innocence.

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January 14, 2009

What is Spot Delivery? Is it Auto Fraud?

What is Spot Delivery?

Spot delivery is when a dealership lets you have a car until financing is approved. Under many circumstances this is improper. What happens when:

They sell the trade before the financing is approved?

Ask for more money?

Change the interest rate?

Ask for their car back?

Do not deliver title?

Do not provide documents?

Repossess the car they gave you?

Threaten you with repossession or reporting to the police if you do not return the car?


These are many of the things that can go wrong and you will need an experienced lawyer who can answer your questions.

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January 11, 2009

Credit Card Companies - New Rules To Help Consumers

Credit Card Companies - New Rules

For years the credit card companies have implemented RULES when the credit card agreement was signed that were onerous at best. With the economy failing the Board of Governors has changed the playing filed to help the consumers and the changes are significant.


New Rules


More time to make your payment

Paying off higher interest rate balance first

Prohibit increased rates for that would be deemed penalty rates

Two cycle billing for balances

Firm offers of credit


These are significant changes but they do not take effect until 2010


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November 17, 2008

Gift Card Fraud and Consumer Fraud

Gift Card Fraud

Gift Cards are a big business, over 18 billion dollars per year. Certain fees are prohibited under New Jersey Law.

Any fees must be disclosed by the retailer when the card is purchased. Certain fees, such a dormancy fees can only be charged after 24 months of inactivity and max out at $2.00 per month.

If you think that you have been charged fees improperly please contact our law firm

Interview on Gift Card Fraud

Most popular gift cards.

Gift card scams.

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November 14, 2008

Wachovia Corp Settlement

Wachovia Settlement

It appears that Wachovia Corp settled for up to $125 million for the following

The telemarketers then used that information to write checks to themselves, purportedly from the consumers they had called. These checks did not require a signature from the accountholder; instead, the signature block included text such as "authorized by your depositor, no signature required."

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November 12, 2008

Hotel Charges that are Fraudulent

Hotel Charges that are Fraudulent. Many business such as hotels are looking for shortcuts by charging, without notice, for many supposed services.. The following are things that you should look for in any hotel stay.

Mandatory bellman charges:
Fees for cancellation
Fees for holding bags
Fees for early departure
Fees for energy surcharges
Fees for handling FEDEX packages
Fees for faxes
Fees for in room safes
Fees for the internet
Minibar fees for restocking
Amenity fees
Phone surcharges

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November 9, 2008

New Jersey Division of Consumer Affairs

New Jersey Division of Consumer Affairs

The State has a great site dedicated to Lemon Law in the State of New Jersey.

There is a list of publications at the Division of Consumer Affairs site.

File a complaint

Licensing Board information.

Division of civil rights

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November 6, 2008

New Jersey Lemon Law

New Jersey Lemon Law

Are there any specific requirements under the New Jersey Lemon Law to send a letter to a Manufacturer before you either file suit or request a hearing before an administrative Judge.

If you file a claim in Superior Court the answer is no, there is no requirement to send a letter to the manufacturer. But if you do send the letter there is a presumption that the vehicle is a lemon.

If you file a request for an administrative hearing you are REQUIRED to send the pre suit letter otherwise the court will not hear your claim.

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October 20, 2008

State Sues to Shut Down Credit Repair Business

State Sues to Shut Down Credit Repair Business

The Asbury Park Press has reported that a credit reporting company in Howell NJ has been sued by the State. According to the story the name of the company is United Credit Adjusters. It is alleged that they accepted fees and failed to perform the represented services. The complaint also alleges that they were misrepresenting the effects of bankruptcy filings and representing that they could reduce credit card debt almost 50%!

This story must be filed under the heading if it is too good to be true it probably is. There are very fully reviewed din this economy strict Federal regulations and Statutes governing credit repair that should be carefully reviewed.

The most important thing to remember is that no credit repair organization is permitted to charge in advance of services performed.

Section 404

(b) Payment in Advance.--No credit repair organization may charge or receive any money or other valuable consideration for the performance of any service which the credit repair organization has agreed to perform for any consumer before such service is fully performed.

There is also a right to cancel under the Federal Statute.

Continue reading "State Sues to Shut Down Credit Repair Business" »

October 5, 2008

Car Repair Scams

Car repair scams. Car repair scams are everywhere.

How do you protect yourself from car repair scams. There is no easy answer because unless you a mechanic you are at the mercy of the mechanic. I would say the following are the most common types or areas where car repair scams proliferate.

Padding The Bill. Do we know what was actually completed?

Transmission Shops. What really is the condition of the car

Other charges. What are the minor charges that you do not recognize.

Cost What is the real cost of the repairs


In order to assist you I found a web site that addresses all of these issues ans would recommend a thorough reading.


What is the law on car repair and car repair scams.

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October 2, 2008

New Jersey And Predatory Lending

New Jersey recognizes a claim for predatory lending.

In Associated Home Equity v. Troup 343 N.J.Super. 254, 269 (App.Div 2001) the Appellate Division held that a plaintiff may establish a colorable claim *** by demonstrating that “defendants' lending practices and loan terms were ‘unfair’ and ‘predatory,’ and that the defendants either intentionally targeted on the basis of race, or that there is a disparate impact on the basis of race.

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September 25, 2008

Car Salesman Code Words

Car Salesman Code Words

Car Salesman have code words for many situations and they are not flattering. Most imply that are maximizing the profit or poor negotiating skills of the salesman. They are real.


(from edmunds.com)
Be-backs - A customer who leaves the car lot promising to return later, saying, "I'll be back," or some variation of that statement. "The guy was a be-back. But I think he meant it. I'll see him again."

Boss - The typical way that salespeople address the managers or the GM. "Hey boss! Got a deal for you!"

Bumping - Raising the customer's offer for a car. "If Mr. Customer says he only wants to pay $250 a month, just say, 'Up to -- ?' He'll probably bump himself up to $300 without you doing anything."

Closer - An experienced salesman who is brought in to "close" the customer by making them agree to a deal. "If I worked with a better closer I'd have more units on the board."

Desk - This is the sales manager, not the place he sits. "Ask the desk if these rebates are still in effect."

Demo - This is the test drive. "This guy comes in, demos the car and I think he's ready to buy, right? Then he tells me the car's for his wife and he can't make a decision without her."

F&I - This stands for the Finance and Insurance office where the documents are signed. The F&I salesperson usually will push products such as extended warranties, fabric protection and alarms. "The wait for F&I is two hours. Better stick with your customer so they don't leave."

Full pop lease - This is when a vehicle is leased at 110 percent of the sticker price - the highest amount allowed by most banks. "I got them into a full pop lease. I'll get a nice voucher for that."

GM - The General Manager. The GM is the head honcho at the dealership. He runs the business from day to day. "The guys were standing out on the curb drinking coffee so the GM called them into the tower and read them the riot act."

Green pea - A new salesperson. "The funny thing is, green peas can outsell the veterans. That's because they don't know how hard this job is."

Grinder - A customer who negotiates for hours over a small amount of money. "We were only $500 apart but the guy wouldn't sign. Man, what a grinder."

Lay down - A customer who takes whatever deal the salesperson offers. "I quoted him monthly payments of $575 and he took it! I wish all the customers were lay downs like that."

Mini - The commission on a deal where the car was sold at close to invoice price. "Sure, the deal was only a mini. But I qualified for a weekend bonus and made a grand."

Mooch - A customer who wants to buy a car at invoice. "People are spending too much time on the Internet. It's turning them into a bunch of mooches."

Packing payments - Adding extra profit to the cost of a car. "This place I used to work got busted for packing payments. Next job I get is going to be in a no-haggle store."

The Point - The place on the car lot where the "up" man stands looking for customers. "The GM saw me standing on the point with my hands in my pockets. He went ballistic and sent me home for the day."

Pounder - A deal with $1,000 profit in it. "Doctor comes in and buys the top of the line model, fully loaded - and he pays sticker! That'll be a two pounder for me."

Rip their heads off - This describes taking a customer to the cleaners. "I stole their trade in, I sold them the car at a grand over sticker - I mean, I just ripped their heads off."

Roach - A customer with bad credit. Not to be confused with the "roach coach" (see entry below). "The guy looked good. But we ran his credit and he turned out to be a roach. We're talkin' a 400 credit score here."

Roach coach - The food truck that comes around to the dealership every day. "I should've known better than to eat that chili from the roach coach. My stomach's killin' me."

Spiff - A tip, kickback or payment of any kind, usually cash which is handed between salespeople. "I spiffed the F&I guy $20 bucks and he took my customers first."

Strong - This has a special meaning on the car lot. It means holding firm on your price and being a tough negotiator. "When they ask for your price you have to be strong. Hit 'em with high payments, then scrape them off the ceiling and start negotiating." (See also "weak.")

Tower - The office where the sales managers work. This is usually a raised platform allowing the managers to see over the roofs of the cars so they can watch customers and their salespeople. "Attention: All new car salesmen report to the new car tower!"

Turn over - Also known as "turning," this is the practice of passing a customer from one salesman to another. It is thought that this will prevent customers from leaving the car lot. The theory is that the customer might just have bad chemistry with the first salesman and he might like the next salesman. "I turned this guy to my partner and he wound up buying. I'll get half of the commission on the deal."

Up - A customer that walks on the car lot. The term probably comes from the order in which customers are taken, as in: "I'm up next." Many dealerships also have an up system. "We've got ups all over the lot, and you're in the back drinking coffee?!"

Voucher - Car salespeople receive a voucher to let them know what their commission was for selling a car. They don't know until the deal is finalized exactly how much they will receive. "Check out this voucher. I thought I had a pounder. Instead it's a mini."

Weak - This describes being a weak negotiator or coming down too quickly on price. "The guy was weak so he only lasted a few months. How are you going to make money in this business if you give away cars?"

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September 4, 2008

Odometer Roll Back

Odometer Roll Back

The Star Ledger reported that a man admitted to odometer fraud in Federal Court on a case that has been pending since 2004.

In 2004 the FBI arrested 17 in a ring that was alleged to have been rolling back odometers.

It was alleged that:

Robert FIORELLO was the financier of the following businesses and as the leader of the Criminal Enterprise, directed all activity in this illegal operation;

JPF AUTO SALES, Bloomfield, NJ
SEMI MOTORS, Garfield, NJ
TRIBUTE AUTO SALES, Bloomfield, NJ
MJS AUTO SALES, Bloomfield, NJ
RP AUTO SALES, Keansburg, NJ
BLOOMINGDALE MOTORS, Bloomfield/Bridgeton, NJ

The enterprise was purchasing cars and rolling the odometers back by hand and by using a computer. The cars would be resold for a higher amount due to the lower mileage.

Odometer roll back

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August 18, 2008

Cherry Hill Triplex

The Attorney General's office has filed suit against Cherry Hill Triplex for violation for the New Jersey Consumer Fraud Act. Cherry Hill Triplex is contesting the charges and asserts their innocence. The State has the burden to prove the case and Cherry Hill is presumed innocent until such time that the State proves their case. The lawsuit asserts that Cherry Hill Triplex violated the New Jersey Consumer Fraud Act. A copy of the complaint can be obtained from the Attorney General's Office.

Count I
Violations of the New Jersey Consumer Fraud Act

a. Advertising a guaranteed and/or unconditional $8,000.00 trade-in allowance,
then failing to give consumers $8,000.00 for their trade-in vehicles;
b. Advertising that a consumer would qualify for credit, then failing to provide
credit to the consumer;
c. Failing to honor the advertised sale and/or lease price terms of a motor
vehicle;
d. Failing to accurately credit trade-in allowances and/or deposits made for
motor vehicle sales and/or leases;
e. Failing to payoff consumers' trade-in vehicles in a timely manner;
f. Failing to provide title and/or registration prior to the expiration of temporary
title and/or registration;
g. Failing to return a consumer's trade-in vehicle upon cancellation of a sale or
lease transaction;
h. Advertising for sale used motor vehicles without possessing title to the motor
vehicles; and
i. Selling used motor vehicles without possessing title to the motor vehicles.

Count II
Material Omission of fact

a. Promising or guaranteeing an $8,000 trade-in allowance;
b. Misrepresenting the terms and conditions of the advertised "$8,000
GUARANTEED FOR YOUR TRADE," "$8,000 Trade-In Sale" and
"$8,000 for your trade, regardless of its condition" deals;
c. Misrepresenting to consumers in television advertising that Defendant will
provide financing for the sale or lease of a motor vehicle without conducting
a credit check or regardless of a consumer's credit;
d. Misrepresenting to consumers in print advertisements the number of new
and/or used motor vehicles that are available for sale or lease at an advertised
price;
e. Misrepresenting to consumers the previous use of a used motor vehicle;
f. Misrepresenting to consumers in television advertising that the first seventy
(70) callers would "instantly qualify" for financing; and
g. Misrepresenting the lowest APR available to the consumer.


Defendant's conduct in violation of the CFA includes, but is not limited to, the
following knowing omissions of material fact:

a. Failing to disclose to consumers, prior to their purchase or lease, that a motor
vehicle had previously been used as a rental vehicle; and
b. Failing to disclose to consumers prior to their purchase or lease any prior
damage to the motor vehicle.

Count III
Advertising Regulation Violations

a. Using the phrase "$8,000 GUARANTEED FOR YOUR TRADE" and then
failing to include the actual limitations adjacent to that offer;
b. Failing to disclose, adjacent to Defendant's advertised price for new and/or
used motor vehicles, that Defendant's advertised price includes deductions
for a manufacturer's rebate and/or dealer's discount;
c. Failing to disclose, immediately adjacent to Defendant's advertised special
offer, the applicable time period;
d. Failing to disclose that advertised motor vehicles were previously damaged
and were subjected to substantial repair and body work:
e. Failing to disclose limitations and qualifiers to Defendant's credit sale;
f. Failing to place a footnote next to an advertisement that places numerous
limitations on the advertised purchase price; and
g. Using small print, graphic illustration and location to obscure material facts
in its advertisements.

Count IV
Failure to Make Credit Sale Disclosures

a. Failing to disclose the annual percentage rate in its credit sale advertisements;
and
b. Failing to disclose the total cost of motor vehicles in its installment sale
advertisements.

August 15, 2008

Direct Buy Complaints

Recently I have received some calls form Direct Buy customers complaining of the terms of the membership. What is going with direct buy customers? Just do a search of Direct Buy and complaints and the results are amazing.

Look at the compilation site. There is extensive information of complaints against Direct Buy.

This link addresses the complaints complaints against Direct Buy.

Complaints maintained by Ripoffreport.com

I am certain that direct buy would deny that they are doing anything improper and the existence of a complaint does not imply they are doing anything wrong.

August 4, 2008

Alleged Lawnmower Horsepower Fraud

An internet source is reporting that there is some alleged fraud regarding the description of horsepower on lawnmowers.

The defendants all well known:

Sears & Roebuck Co., Briggs & Stratton, Deere & Co., Tecumseh Products Co., Briggs & Stratton Corp., Kawasaki Motors Corp. USA., MTD Products, The Toro Co., American Honda Motor Co., Electrolux Home Products, The Kohler Co., Platinum Equity LLC, and Husqvarna Outdoor Products.

The New Jersey lawnmower horsepower fraud class action lawsuit alleges
1 Affirmatively misrepresenting the horsepower on various lawnmowers
2 Concealing the true horsepower of these products
3 False advertising

Web comments

There also appear to be a civil conspiracy element to this. They are alleging that there was a conspiracy through "'Power Labeling Task Force,"

If you though you were getting a certain product at a specific horsepower and it never measured up to horsepower you could potentially be a class member.

There is also another possible aspect of this lawsuit and that would be the breach of warranty case. If the HP was represented as X and really was Y that would be a breach of warranty and actionable under the Mag-Moss Act

July 27, 2008

Consumer Fraud Act: Decpetive Practices.

The New Jersey Consumer Fraud Act is very powerful legislation. The Consumer Fraud Act as written prohibits deceptive practices in the selling of goods and services. The Consumer Fraud Act jury instructions specifically define deceptive practices as the following:

An “unconscionable commercial practice” is an activity in the public marketplace which is basically unfair or unjust and/or which materially departs from standards of good faith, honesty in fact and fair dealing. To find a commercial practice to be unconscionable, there should be factual dishonesty and a lack of fair dealing

There is a very good case in New Jersey to illustrate a deceptive practice.

In Herner, the Superior Court, Appellate Division, held that inspection company engaged in an unconscionable commercial practice in violation of the statute by failing to provide purchasers an inspection and report forthrightly disclosing certain physical conditions of house, and by failing to disclose that real estate agent was company's customer in fact and that company's marketing philosophy was to stress both positive and negative aspects of a house so that consumer would have little basis for calling off sale or renegotiating price.

July 18, 2008

Vineland Pool Company and State Lawsuit

According to an online source the The state is suing Castaway Pools & Spas of Vineland for allegedly violating consumer fraud and home improvement contracting laws.

The Consumer fraud Act permits the State to take appropriate action as part of their sovereign power and provides them with almost limitless remedies under the Consumer Fraud Act.

The people who were victims have several choices. They can work with the State to get their Consumer Fraud damages or they can sue on their own. There are pluses and minuses for both options, but if you work with the State you will probably will have less input than in a private civil action against the company in a civil action.

The State provided a press release

July 17, 2008

Consumer Fraud. Let the seller beware!!!

There is a phrase in Latin that means let the buyer beware, Caveat Emptor. New Jersey has abandoned this principle as it pertains to the Consumer Fraud Act. New Jersey through the Consumer Fraud Act has adopted a more ethical approach to sales. It is now the law that a person has the right to rely on representations made by another when dealing with that other person. The Consumer Fraud Act jury instructions specifically hold this to be true. 4.43 Consumer Fraud Act

The seller now has the responsibility to make sure that the representations as to their product are accurate and if they are wrong the responsibility of the seller of the goods.

June 23, 2008

New Jersey Consumer Fraud Act: Triple Damages?

New Jersey Consumer Fraud Act: Triple Damages?

Triple damages are mandatory. That means of there is a verdict for any ascertainable loss the amount is tripled by the court without discretion and automatically. You must prove a loss or commonly known as an ascertainable loss. This amount is tripled.

My web site has some good information.

June 12, 2008

New Jersey Consumer Fraud Should be Liberally Construed.

THE NEW JERSEY CONSUMER FRAUD ACT
SHOULD BE LIBERALLY CONSTRUED
TO EFFECTUATE ITS REMEDIAL PURPOSE.


The New Jersey Consumer Fraud Act should be liberally construed to effectuate it remedial purpose. The New Jersey Consumer Fraud Act was passed in 1960 to permit the Attorney General to combat the increasingly widespread practice of defrauding the consumer. Cox v. Sears Roebuck & Co., 138 N.J. 2, 14 (1994) (quoting Senate Committee, Statement to the Senate Bill No. 199 [1960].) The New Jersey Consumer Fraud Act, N.J.S.A. 56:8-2, states:

“Any act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false promise, misrepresentation, or the knowing concealment, suppression or omission, of material fact with intent that others rely upon such concealment, suppression, or omission in conjunction with the sale . . . or with the subsequent performance of such person as aforesaid, whether or not any person has, in fact, been misled, deceived or damaged thereby, is declared to be an unlawful practice.

The Consumer Fraud Act was initially designed to combat sharp practices and dealings that victimize consumers by luring them into purchases through fraudulent or deceptive means. Id. at 16. See also, Lemelledo v. Beneficial Management, 289 N.J. Super. 489, 495 (App. Div. 1995). In 1971, it was specifically amended to include a private cause of action with treble damages, giving New Jersey one of the strongest consumer protection laws in the nation. Cox at 15, Lemelledo at 495. Quoting Governor’s Press Release for Assembly Bill No. 2402, at 1 (April 19, 1971): “The Consumer Fraud Act is no longer aimed solely at shifty, fast-talking and deceptive merchants, but reaches non-soliciting artisans as well.” Thus, the Act is designed to protect the public, even when a merchant acts in good faith. Cox at 16.

Both the New Jersey Supreme Court and the Legislature have declared that the New Jersey Consumer Fraud Act is a remedial statute and, as such, should be construed liberally in favor of consumers. Cox at 16. The Legislative history supports this conclusion, evidenced by two significant Amendments to the Act. In 1962, the Act was amended to include a cause of action for “deceptive practices”. Also, in 1975, the Legislature amended the Act to include unlawful practices in the sale and advertisement of real estate. An analysis of relevant New Jersey law supports the proposition that the Consumer Fraud Act should be liberally in an expansive fashion to protect the consumer for potentially deceptive conduct.

June 6, 2008

Damaged Cars and Suing the Lender

Damaged Cars and Suing the Lender.

You can collect from the lender for defective cars under the HOLDER RULE.

Since the contract that the lender is holding permits the buyer to sue the lender the lender can be sued up to the amount paid on the contract. The lender in in the position to allocate the rick for such losses and defray the risk

June 4, 2008

Consumer Fraud and Damaged Cars?

Consumer Fraud and Damaged Cars?

What happens if the dealer sells you a damaged car? Have they violated the New Jersey Consumer Fraud Act?

AFFIRMATIVE MISREPRESENTATIONS VIOLATE THE CONSUMER FRAUD ACT

The law in New Jersey is no longer buyer beware and New Jersey has taken the more ethical approach to the sale of goods. The dealer is charged with knowing the goods that they sell such as cars. If they make a promise that the car has not been in an accident they must make good on the affirmative representation. If their statements are false then the dealer can be sued for a violation of the Consumer Fraud Act NJSA 56:8-2

May 20, 2008

Real Estate Agents: Seller's Disclosures

Do you know what a seller's disclosure is? Almost all sellers agents have the seller complete this to protect themselves as much as to help the buyers. It includes all major defects and some minor ones. As a buyers your lawyer should demand that the disclosure is completed and your lawyer should follow up to make sure that the items are repaired that are listed in the agreement.

May 11, 2008

Realtors and Ethics

did you know that real estate agents have a code of ethics? They do. They are required to make full disclosure to their client and the other party to the transaction.

ETHICS

Realtors get sued under the Consumer Fraud Act. This time of year many people are buying houses and they should be familiar with the duties of real estate agents

Real estate fraud investigation also increased

May 10, 2008

NJ Consumer Fraud Act & Damages: The answer ?

Lets use this example:

You unknowingly buy a crash damaged car for $30,000 and it is dangerous to drive and you would never have purchased the car BUT it has a NADA value of $10,000. You now have driven the car for 5 years due to the length of the litigation and the car has 100,000 miles. Under current case law the damages are $20,000. Under breach of contract your damages are $20,000. While it is true the damages are tripled under the Act the dealer gets the benefit of the having sold you the car. BUT the dealer might argue that you drove the car and you have no damages. Does this seem fair that you were forced to drive a car you did not want, you only purchased because the dealer lied to you about the history and they get a mileage credit. NO NO NO.

Here is the answer. The damage is the purchase price. The dealer can argue some offset for value or use that a jury can accept or reject, This amount it tripled under the Act and then the set off is applied.

This is only fair since the dealer lied to sell the car, the consumer got a damaged car they did not want and was forced to drive the car. The burdens should be shifted to reflect the purpose of the Act

May 9, 2008

NJ Consumer Fraud Act & Damages: Whats wrong with this picture?

The Courts continue to interpret the Consumer Fraud Act in such a way that limits the remedial nature of the act. Courts have been strictly applying breach of contract principles to the damages analysis. The issue is what is the ascertainable loss that is recoverable under the act? The Court has been requiring a benefit of the bargain analysis. As an example, if you buy a product that costs you $100 and it is worth $40 you damages are $60. Or maybe you purchased the product for $100 and you sold it for $60 your damages would be $40.

Here is the problem. The New Jersey Consumer Fraud Act is not breach of contract and should not be analyzed as a breach of contract. The Act was in addition to the remedies that already existed. So lets answer this, why are the breach of contract damages the same as fraud damages? I don't know. This analysis gives the defendant the benefit of his improper conduct. Why should the defendant get to keep the profit or get any benefit of the sale? I don't know? Why does the plaintiff have to pay for experts, costs that are not reimbursed under the Act, and not be able to afford to pursue the claim? I don't know.

I do have an answer that makes sense.

April 22, 2008

Top Consumer Complaints in New Jersey

Used Cars

Computer Sales

Debt Collection

Internet Sales / Goods

Telecommunications

Home Improvement Repair - General

Health Spas / Health Clubs

Home Furniture / Furnishings

Car Repair

April 19, 2008

New Lawsuit filed against Schering and Merck in New Jersey: RICO and Consumer Anti Fraud

I picked up a blog that makes reference to a new lawsuit filed against Schering and Merck. If anybody has a link to the filed civil action from PACER please e-mail me the link

March 30, 2008

Remedies Under The New Jersey Consumer Fraud Act (Part I)

The New Jersey Consumer Fraud Act is one of the most powerful in the nation. It provides for the mandatory awarding of triple damages for any ascertainable loss. As an example if you have lost one dollar you would be entitled to three dollars in damages. If the defendant has committed consumer fraud the claimant would also be entitled to an award of attorney fees and costs.

The New Jersey Consumer Fraud Act requires that the claimant has sustained an ascertainable loss to receive a recovery under the act. Under certain circumstances fees can be awarded with no ascertainable loss.

Cases

Weinberg v. Sprint Corp., 173 N.J. 233, 240 (2002) (Plaintiff need only present a fact issue to the jury as to whether there is an ascertainable loss to have fees awarded even if the jury awards no damages)


March 25, 2008

Branded Titles: Lemon and Salvage Titles

New Jersey places the responsibility upon titled owners to brand titles under certain circumstances to put a subsequent purchaser on notice as to some defective condition. As an example the New Jersey Lemon Law requires buy backs to be branded by the manufacturer. New Jersey Law also requires cars that have been totaled by insurance companies to have a branded title if the cost to repair is greater than the actual cash value of the car.

The purpose of these laws is to make sure all purchasers of these car are aware of the history of the cars.

March 23, 2008

The New Jersey Consumer Fraud Act

New Jersey has one of the strongest consumer laws in the country and it is known as the Consumer Fraud Act. It applies to both the sale and attempted sale of goods and services. It is liberally construed to effectuate the remedial purpose of the statute.

It applies to the sale of real estate and financial products such as life insurance. There are a host of associated regulations that were created to enforce the act: Automotive repair, automotive advertising, general advertising, sale of used cars, labeling of foods, the leasing of cars, home improvements and even the sale of furniture

The act requires the tripling of any damages and requires the court to award attorney fees

March 14, 2008

Car dealer, salesman indicted in fraud involving dealership

The Asbury Park Press is reporting that there have been indictments of Michael Kouvaras, 55, of Maplewood and Salvatore Rivello, 56, of Matawan. They were indicted for theft by deception, identity theft, deceptive business practices and defrauding secured creditors. I will be getting a copy of the indictment form the Prosecutors Office so as to comment further. The dealership was Chrysler of Eatontown according to the Press. Will follow up with details.

March 12, 2008

Negotiation With Car Salesman: Remember The Facts.

When you negotiate with a car salesman you need to remember some important statistics. There are over 21,000 new car dealerships in the country and over 550 new car dealerships in the State of New Jersey. The car you want is at another dealership, probably for less. Get up and walk out, if you can. This might not be a real option if they have your trade vehicle and it is lost or sold or they can't find it anywhere.

All you need to do is look at all the advertising on the web and in the newspaper to see the level of competition. You actually have the upper hand. also try to have financing approved before you enter the dealership so you have the leverage. Get everything in writing. Do not trust anybody.Never go to the dealership alone. Some more help

Good Luck..

March 10, 2008

Autofinance Discrimination

The national Consumer Law Center has participated in extensive litigation against some of the largest finance companies in the world alleging that the impact of the loans was to discriminate against either African American or Hispanic consumers. The lawsuits, which exposed practices operated secretly for over 75 years and had resulted in higher-interest rate car loans for minorities, have transformed car financing practices across the industry.

Here is a list of all the suits in which they have participated.

Baltimore v. Toyota Motor Credit Corp
Smith v. Daimler Chrysler Financial
FMCC (Joyce Jones, et al. v. Ford Motor Credit Company)
GMAC (Coleman v. General Motors Acceptance Corporation)
NMAC (Cason v. Nissan Motors Acceptance Corporation)
AHFC (Terry Willis, et al v. American Honda Finance Corporation)
Borlay v. Primus Automotive Financial Services, Inc. and Ford Motor Credit Company
Bank Auto Finance Discrimination Cases

The problem occurred in the selling dealerships right to mark up interest rates which is primarily unregulated by the lenders or the Federal Government. Studies revealed that the dealership conduct in marking up the interest rates on car purchases and financing for Hispanics and African Americans. There was a study performed to prove this fact.


All the settlements, if any, were done without admissions of any wrong doing and the finance companies have ALWAYS denied any wrong doing.

March 9, 2008

What Should You do If You Think a You Have Been Ripped Off by a Car Dealer?

You have a range of choices none of which are really attractive.

Return to the dealership and confront the management. You need to be very confident and have the ability to negotiate against skilled salesman and do it under stress. You don't have a chance. You know it and the dealer knows it. STAY AWAY. Not recommended.

File a complaint with the Better Business Bureau or the Consumer Affairs Office in your county. They have no ability to force the dealership to do anything. Its all voluntary. Just a further waste of your valuable time.

Hire an attorney and file a lawsuit. This is usually you best option EXCEPT it is hard to find a lawyer that sues car dealership and even harder to find an attorney with significant experience who will not charge an arm and a leg. If you find the right attorney this is your best option.

The consumer laws in New Jersey are expansive and powerful. The Consumer Fraud Act provides for triple damages and counsel fees if you win. This is the only thing that the dealer will understand.

March 1, 2008

Cherry Hill Triplex Gets Sued for Consumer Fraud!!! (2006)

I have been looking for internet posts for Cherry Hill Triplex litigation. (2006) I found a case that was filed by a law firm alleging that Cherry Hill Triplex committed consumer fraud. The suit alleged that the dealership took advantage of an older person in need of wheel chair assistance. I do not know the current status of the litigation not do I know what the dealer response was to this allegation. I am sure they denied the claims.

I have browsed the net for other people who have had ISSUES with this dealership and there are some unhappy people out there. Read This.

February 25, 2008

Saturn of Toms River NJ

I have a pending class action suit in Superior Court of New Jersey alleging that Saturn of Toms River is not providing the employee discount to those who should receive the General Motors employee discount. If you have acquired a car from Saturn Toms River and think that you should have received the employee discount please call my office.
Carton and Rudnick, 262 HWY 35, Red Bank, NJ 07701 (732) 842-2070

Continue reading "Saturn of Toms River NJ" »

February 19, 2008

The New Jersey Consumer Fraud Act Requires an Ascertainable Loss

To satisfy the ascertainable loss requirement the plaintiff need prove only that he has purchased item partially as a result of an unfair or deceptive practice or act and that the item is different from that for which he bargained. If one sets out to purchase two things, and for the price paid receives only one, the conclusion seems inescapable that there has been an ascertainable loss. Whenever a consumer has received something other than what he has bargained for, he has suffered a loss of money or property. That loss is ascertainable if it is measurable even though the precise amount of the loss is not known. When the product fails to measure up to reasonable expectations based on the representations made, the consumer has been injured: he has suffered a loss. He has lost benefits of the product, which he was led to believe he had purchased. Miller v. American Family Publishing, 284 N.J.Super 67, 88 (App.Div. 1995). The New Jersey Supreme Court has held that a consumer debt, which is a result of consumer fraud, can be an ascertainable loss. Cox v. Sears Roebuck & Co. 138 N.J. 2, 21-23 (1994)
In an ordinary breach-of-contract case, the function of damages is simply to make the injured party whole, and courts do not assess penalties against the breaching party. However, the goals of the Act are different. Although one purpose of the legislation is clearly remedial in that it seeks to compensate a victim's loss, the Act also punishes the wrongdoer by awarding a victim treble damages, attorneys' fees, filing fees, and costs. In that sense, the Act serves as a deterrent. Therefore, in determining whether plaintiff has established a loss under the Act, we are guided by but not bound to strict contract principles*** We conclude that an improper debt or lien against a consumer-fraud plaintiff may constitute a loss under the Act, because the consumer is not obligated to pay an indebtedness arising out of conduct that violates the Act.

Therefore the plaintiff need only prove that the contract or debt resulted from fraud or consumer fraud and it would then be the defendant’s burden to prove setoff. In Lotito v. Mercedes Benz, 328 N.J.Super. 491 (App.Div 2000) the Court held that the burden of proof shifted to the defendant after the plaintiff proved he made all the payments on the lease. Lotito was a breach of warranty case, not a consumer fraud case, but the equities are the same. The Consumer Fraud Act is to be generally construed since it is remedial legislation.

The Lotito Court held:

Generally, burdens of proof are not allocated in statutory law but are left to the courts as matters of procedure. In re Will of Smith, 108 N.J. 257, 264, 528 A.2d 918 (1987). Judicial allocation of the burden of persuasion "can vary depending upon the type of proceedings, the comparative interests of the parties, the relative litigational strengths or weaknesses of the parties, the access of the parties to proof, and the objectives to be served by the evidence in the context of the particular proceeding." Romano v. Kimmelman, 96 N.J. 66, 89, 474 A.2d 1 (1984). Obviously, the lessee has no interest in establishing the value of the use of the vehicle and the lessor has every interest in proving that the value of the use equaled or exceeded the amounts paid by the lessee. In addition, the lessor, because of the nature of its business, is in a far better position to provide evidence of the value of use. Although generally the party seeking damages has the burden of proof, Caldwell v. Haynes, 136 N.J. 422, 436, 643 A.2d 564 (1994), Lotito should be viewed as having satisfied that burden by proving what he had paid. The burden of proving the claimed offset for the value of use fairly belongs on the party in breach in these circumstances. Cf. Block v. Diana, 252 N.J.Super. 650, 657-58, 600 A.2d 520 (App.Div.), certif. denied, 127 N.J. 564, 606 A.2d 375 (1992). Id at 512.

Plaintiff must demonstrate the case by a preponderance of the evidence. See Liberty Mutual v. Budge, 186 N.J. 163 (2006)

The appellate Division recently revisited the issue of ascertainable loss pertaining to defective cars in Thiedeman v. Mercedez Benz, 183 N.J. 234, 248 (2005)

To repeat, plaintiffs have a car with a defect in a significant component, which defect is present in every replacement of that component, and will likely manifest itself at some future time. We believe that common knowledge, indeed common sense, compels a conclusion that the value of the vehicle is impaired to a measurable, if presently unknowable degree. Can it possibly be doubted that if the Flahertys sought to sell their vehicle on the used car market, and advised prospective buyers of the fuel-sending unit problem, that they would receive less than if the vehicle had no such defect? We think not. This proposition is "so universally known that [it] cannot reasonably be the subject of dispute," N.J .R.E. 201(b)(1), and is, therefore, subject to judicial notice by us. N.J.R.E. 202(b). The loss we posit is not simply a loss of consumer expectation or an unquantifiable benefit-of-the-bargain loss. There is more here than just a sense of unease in driving a car that has a potential problem that could impact on safety. There is a loss in value, not simply a loss of expectation

The New Jersey Supreme Court has been clear in this issue. The defendant cannot reap the benefit of their own fraudulent actions. They cannot retain the benefits of a debt or a transaction which was improperly and illegally created. For the Supreme Court to hold to the contrary, they would only encourage fraudulent conduct wherein defendants could claim that claimants somehow received the benefit of the defendants’ fraudulent acts. Had the defendant NOT OMITTED the negative equity in the retail installment sales contract, clearly the transaction could not have been completed/approved. The New Jersey Supreme Court in Cox specifically held that a debt which is illegally or improperly created constituted an ascertainable loss under the New Jersey Consumer Fraud Act. Indicative of the defendant’s intent is its failure to have a copy of the retail agreement in their files. Apparently, the defendant attempted to hide their illegal and improper actions.
This interpretation of the application of the Consumer Fraud Act by the New Jersey Supreme Court is consistent with the statutory framework pertaining to remedies for fraud.
N.J.S.A. 2A:32-1. Remedies of person defrauded

Continue reading "The New Jersey Consumer Fraud Act Requires an Ascertainable Loss" »

February 18, 2008

Sub Prime Car Loans.

The auto industry is ripe with questionable conduct. This interview with an industry insider reveals that there are wide spread abuses with the granting of credit for consumers.

Continue reading "Sub Prime Car Loans." »

February 16, 2008

Failure to Reveal Material Facts is Actionable Under the Consumer Fraud Act.

Omissions of material fact are actionable under the New Jersey Consumer Fraud Act. See Cox v. Sears, 138 N.J. 2, 18 (1994). The New Jersey Supreme Court has held that when an alleged consumer fraud consists of an omission of material fact, the plaintiff must show that the defendant acted with knowledge, and intent is an essential element. The seminal New Jersey decision pertaining to nondisclosure is Weintraub v. Krobatsch, 64 N.J. 445 (1974). The Supreme Court held that deliberate concealment of a latent defective condition material to the transaction constitutes sufficient grounds to justify rescission of a contract to purchase realty. See Correa v. Maggiore 196 N.J. Super. 273 (1984) Since rendition of that opinion, this principle has been expanded to permit recovery of monetary damages and has been applied in a broad variety of circumstances. See e.g., Jewish Center of Sussex Cty. v. Whale, 86 N.J. 619 (1981); Carlsen v. Masters, Mates & Pilots Pension Plan, 80 N.J. 334 (1979); Environmental Protection Dep't. v. Ventron Corp., 182 N.J. Super. 210 (App. Div. 1981), modified 94 N.J. 473, 468 A.2d 150 (1983); Neveroski v. Blair, 141 N.J. Super. 365, 358 A. 2d 473 (App. Div. 1976); Berman v. Gurwicz, 178 N.J. Super. 611 (Ch. Div. 1981); Tobin v. Paparone Const. Co., 137 N.J. Super. 518 (L. Div 1975)
In Strawn v. Canuso, 140 N.J. 43, 65 (1995), the New Jersey Supreme Court held that a residential builder, developer and broker were liable to homebuyer’s for non-disclosure of off-site physical conditions known to the defendants, which were unknown to the buyer. The silence of the defendants created a mistaken impression by the purchasers. In Strawn, the defendants used sales promotion brochures, newspaper advertisements and fact sheets to sell the homes. The materials portrayed the homes in a peaceful, bucolic setting with an abundance of fresh air and clean lakes. Although the promotional materials mentioned how far the properties were from local malls, country clubs and train stations, neither the promotional material nor any of the sales’ representatives referred to a land fill which was located near the development. Id. at 61. The New Jersey Supreme Court upheld the Appellate Division’s finding that the defendants’ conduct violated the New Jersey Consumer Fraud Act.
In Tobin v. Papparone Construction Co., 137 N.J. Super 517 (Law Div. 1995), the Appellate Division held that silence as to the character of the surrounding neighborhood operated to induce the purchasers to buy and the silence as to a material fact was fraudulent. In Berman v. Gerwitz, 189 N.J. Super 89 (Ch. Div. 1981), the Court held that the sellers committed an act of fraud by not disclosing that the complex recreational facilities were separate from their purchase of their condominium. The suppression and withholding of truth is equivalent to a falsehood. The defendants have a duty to recognize material facts and make proper disclosures. Strawn, supra, at 62. (Emphasis added).

February 15, 2008

Affirmative misrepresentations are actionable under the New Jersey Consumer Fraud Act

Affirmative misrepresentations are actionable under the New Jersey Consumer Fraud Act. See, Cox v. Sears, 92 N.J. Super 1, (1994). In order for an affirmative misrepresentation to be actionable under the New Jersey Consumer Act, it must be 1) material to the transaction; 2) fact; and 3) false. See, Gennari v. Weichert Realtors, 148 N.J. 582, 607 (1993); Vaccarello v. Massachusetts Mutual Life Ins. Co., 2000 W.L. 76404 (App. Div. 2000); Ji v. Palmer, 33 N.J. Super. 451 (App. Div 2000)
A statement is material if: a) a reasonable person would attach importance to its existence in determining a choice of action; b) the maker of the representation knows or has reason to know that if its recipient regards or is likely to regard the matter as important in determining his choice of action although a reasonable man would not so regard it. See, Ji v. Palmer, supra.

In Ji, the Appellate Division held that the trial court improperly dismissed the plaintiff’s Complaint at the end of the plaintiff’s case. The Appellate Division held that the plaintiff properly set forth a prima facie case and as such, the trial court was mistaken and the case should be reinstated. In Ji, the plaintiff purchased commercial real estate and alleged that the defendant made an affirmative misrepresentation at closing that the Certificate of Occupancy satisfied the City’s requirement that a Certificate of Land Use be obtained upon transfer of title. The trial court, improperly, dismissed the plaintiff’s case because the plaintiff could not show that the misstatement was made knowingly. The Appellate Division reversed, holding that the plaintiff’s were not required to show the defendant’s knowledge of the falsity of his statement or an intent to deceive. The plaintiff sufficiently proved that the defendant made a material misrepresentation of fact, which was false. The Court held: The Consumer Fraud Act is intended to protect consumers from deception and fraud, even when committed in good faith. An intent to deceive is not a prerequisite for the imposition of liability.
The burden of proof is on the plaintiff to establish by clear and convincing evidence each of the following elements. First, that defendant made a false representation of fact to him/her. Second, that defendant knew or believed it to be false. Third, that defendant intended to deceive plaintiff. Fourth, that plaintiff believed and justifiably relied upon the statement and was induced by it to (action taken or omitted). Fifth, that as a result of plaintiff's reliance upon the statement, he/she sustained damage. Model Civil Jury Instructions 3.19

February 14, 2008

Do You Have The Right To Cancel A Car Purchase?

Most people think that the consumer has the right to cancel a car purchase agreement within three days form signing the agreement. This in not true. You cannot cancel a contract but there a few exceptions.

The dealer permits you to cancel the contract within a certain period of time. This is true for some of the manufacturer certified used car programs or even the internal dealer policy.

The car is delivered on a condition agreement before financing is approved. You have the right to get out of the deal.

On lease vehicles you have one business day to cancel unless you waive this as part of the negotiations. This is usually in fine print at the bottom of the lease agreement.

February 12, 2008

Do Automobile Dealers Know when Cars Have Been in an Accident? Part I

The answer is simple: YES YES YES.

AUTOMOTIVE INDUSRTY STANDARDS

Dealers are required to inspect the cars before they sell them to the public. Industry standards mandate this result. They are in the best position and have the expertise to make these safety inspections. This aside, common sense mandates this result. Why would a dealer want to open himself to liability for selling a dangerous car when they had the chance to assure the car was safe? At a minimum they do not want a pissed off customer with many mechanical complaints. Bad for business. Might cost the dealer money in repairs. Might get sued.

Also the dealer has a process for acquiring car from auctions, on trades and by whole sale to assure that the cars are not damaged. Most of the auctions have special designations for damaged cars. Green light means no problem while cars sold under the yellow and red light have problems, mechanical or otherwise. Manheim Auto Auction is the main source of cars for these dealerships and they have a detailed system of disclosure. Manheim actually offers an inspection service for those buying and selling cars at the auction to assure an open and honest market place.

Continue reading "Do Automobile Dealers Know when Cars Have Been in an Accident? Part I" »

February 5, 2008

Deceptive Conduct is Actionable

The capacity to mislead is the prime ingredient in all types of consumer fraud. See, Cox v. Sears Roebuck & Co., 138 N.J. 2,17 (1995).

An excellent example of deceptive, but truthful conduct, is contained in Miller v. American Family Publishing, 284 N.J. Super 67, 76 (App. Div. 1995), where the Court held that the plaintiffs establish a prima facie case and the defendant’s Motion for Summary Judgment should be denied. In Miller, the plaintiffs contended that the defendant’s advertising materials were deceptive and violated the New Jersey Consumer Fraud Act in three respects. First, plaintiff said that the defendants deliberately planted the impression that the chances of winning in its sweepstakes were enhanced by ordering a magazine subscription. Second, plaintiffs claimed that those who responded to defendants earlier mailings were, thereafter, urged to submit further responses from misrepresentations that they had survived a “winnowing down” process which had placed them in a select group of finalists and had increased their chances of winning. Thirdly, plaintiffs pointed to defendant’s “alert” to sweepstakes participants who had not ordered the magazines, implying that a continued failure to subscribe would lead to their being dropped from the contest. The Court held as follows:
“ . . . here the entire tenor of the defendant’s promotional literature has the capacity to mislead. It misleads by strongly implying that purchase of a magazine subscription will enhance one’s chances of winning the sweepstakes. It mis-leads by saying (not just implying) that the contestant to whom the mailing is addressed has survived some earlier thinning out process and now has an enhanced likelihood of success in the sweepstakes. And, it misleads by indicating that if the reader does not buy a subscription, he or she will be dropped from any opportunity to win the sweepstakes.” Id. at 83.

The Court held specifically that the defendant’s disclaimers, nor the literal truth of the solicitations, constituted a defense to any of the plaintiffs’ claims. Id. at 84.
Miller was pre-dated by the case of Barry v. Arrow Pontiac, 193 N.J. Super 613 (1984), (App. Div. 1984), wherein the Appellate Division held that the automobile dealership advertising “dealer invoice” prices was inherently deceptive. The Court held as follows:
“When a dealer advertises that he is selling a car for what it costs, the reader can easily be misled into believing that if he purchased the car, he would be getting a bargain, not realizing that the advertiser’s idea of the cost may include a portion of overhead and payment to manufacturers, which would be later refunded.”

As can be seen by the applicable case law, the New Jersey Courts have a long history and strong tradition of prohibiting deceptive conduct.
In respect of what constitutes an "unconscionable commercial practice, this Court explained in Kugler v. Romain that unconscionability is "an amorphous concept obviously designed to establish a broad business ethic." The standard of conduct that the term "unconscionable" implies is lack of "good faith, honesty in fact and observance of fair dealing." Id. at 544, 279 A.2d 640.106. See Herner v. House of America,349 N.J.Super 89 (App.Div 2002)

The model civil jury charge defines the following:

“Deception” is conduct misleading to an average consumer. It does not matter that at a later time it could have been explained to a more knowledgeable and inquisitive consumer, nor need the conduct or advertisement actually have misled the plaintiffs. The fact that the defendants may have acted in good faith is unimportant. It is the capacity to mislead that is important.


“Unconscionable commercial practice” is an activity in the public marketplace which is basically unfair or unjust and/or which materially departs from standards of good faith, honesty in fact and fair dealing. To find a commercial practice to be unconscionable, there should be factual dishonesty and a lack of fair dealing.

“Fraud” is a perversion of the truth, a misstatement or a falsehood communicated to another person creating the possibility that the other person will be cheated
See the model jury instruction for consumer fraud section 4.23

Continue reading "Deceptive Conduct is Actionable" »

February 3, 2008

The New Jersey Consumer Fraud Act Must be Liberally Construed to Effectuate its Remedial Purpose

The New Jersey Consumer Fraud Act should be liberally construed to effectuate it remedial purpose. The New Jersey Consumer Fraud Act was passed in 1960 to permit the Attorney General to combat the increasingly widespread practice of defrauding the consumer. Cox v. Sears Roebuck & Co., 138 N.J. 2, 14 (1994) (quoting Senate Committee, Statement to the Senate Bill No. 199 [1960].) The New Jersey Consumer Fraud Act, N.J.S.A. 56:8-2, states:
“Any act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false promise, misrepresentation, or the knowing concealment, suppression or omission, of material fact with intent that others rely upon such concealment, suppression, or omission in conjunction with the sale . . . or with the subsequent performance of such person as aforesaid, whether or not any person has, in fact, been misled, deceived or damaged thereby, is declared to be an unlawful practice.

The Consumer Fraud Act was initially designed to combat sharp practices and dealings that victimize consumers by luring them into purchases through fraudulent or deceptive means. Id. at 16. See also, Lemelledo v. Beneficial Management, 289 N.J. Super. 489, 495 (App. Div. 1995). In 1971, it was specifically amended to include a private cause of action with treble damages, giving New Jersey one of the strongest consumer protection laws in the nation. Cox at 15, Lemelledo at 495. Quoting Governor’s Press Release for Assembly Bill No. 2402, at 1 (April 19, 1971): “The Consumer Fraud Act is no longer aimed solely at shifty, fast-talking and deceptive merchants, but reaches non-soliciting artisans as well.” Thus, the Act is designed to protect the public, even when a merchant acts in good faith. Cox at 16.

Both the New Jersey Supreme Court and the Legislature have declared that the New Jersey Consumer Fraud Act is a remedial statute and, as such, should be construed liberally in favor of consumers. Cox at 16. The Legislative history supports this conclusion, evidenced by two significant Amendments to the Act. In 1962, the Act was amended to include a cause of action for “deceptive practices”. Also, in 1975, the Legislature amended the Act to include unlawful practices in the sale and advertisement of real estate. An analysis of relevant New Jersey law supports the proposition that the Consumer Fraud Act should be liberally in an expansive fashion to protect the consumer for potentially deceptive conduct.

Continue reading "The New Jersey Consumer Fraud Act Must be Liberally Construed to Effectuate its Remedial Purpose" »

February 3, 2008

New Jersey Consumer Fraud Act

New Jersey Consumer Fraud Act is one of the strongest Consumer statutes in the country. It provides for mandatory triple damages and attorney fees if you are successful. The posts in this category are primarily for lawyers or those writing briefs on the Act. I will include both basic and more advanced points of law. Good luck.

Carton and Rudnick is a law firm located in Red Bank/Middletown New Jersey and has extensive experience in litigating against car dealerships and other defendants using the Consumer Fraud Act.