Articles Posted in New Jersey Consumer Fraud Act

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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.

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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 it is the responsibility of the seller of the goods.

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Triple damages are mandatory. That means if 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 what is commonly known as an ascertainable loss. This amount is tripled.

My web site has some good information.

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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 its 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.

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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 is in the position to allocate the risk for such losses and defray the risk.

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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.

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Do you know what a seller’s disclosure is? Almost all seller’s 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 buyer, 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.

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Let’s 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 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.

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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 your damages are $60. Or maybe you purchased the product for $100 and you sold it for $60; then 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 let’s 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.

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