The New Jersey Consumer Fraud Act – Three Essential Questions
What is consumer fraud?
The New Jersey Consumer Fraud Act defines consumer fraud as “any unconscionable commercial practice, deception, fraud, false pretense, false promise or misrepresentation” in connection with the sale of goods, services or real estate. In this context, the word "sale" includes rentals in addition to the traditional sale of goods and services.
What are the three ways in which an act of consumer fraud can be committed?
Affirmative Misrepresentation - This is a statement that is untrue regardless of whether the party making the statement knows it or not. Traditionally, it is assumed that an act of fraud must be a lie or an intentional misrepresentation. The Consumer Fraud Act establishes that if the statement is untrue, then it is consumer fraud regardless of intent.
Knowing Omission - This is when a party knows a fact that is important to the transaction, but neglects to tell you. The Consumer Fraud Act defines this as the “knowing concealment, suppression or omission of any material fact.”
Regulatory Violations – These are statutes or regulations enacted to interpret the Consumer Fraud Act itself. These statutes define specific conduct prohibited by law and cover many topics, which include home improvement contracts, gym memberships, children’s toys and products, and plenty more.
What are the penalties for a violation of the New Jersey Consumer Fraud Act?
Along with one of the above violations, you must prove that there is an “ascertainable loss” related to the act of consumer fraud. This refers to any damage that is quantifiable or measurable. This also covers any future out-of-pocket expense you may be required to make provided it is quantifiable or measurable.
If a party is found to have committed an act of consumer fraud, that party must then pay three times the amount of damages awarded. This is known as treble damages and is mandatory. Attorney fees are also recoverable.
Can you sue both the principal of a business entity along with employees of the business?
The Consumer Fraud Act broadly defines “person.” It includes both natural persons and business entities such as corporations, LLCs and partnerships. Based on the Consumer Fraud Act and New Jersey case law, both the entity and certain employees and principals should be named as defendants in a case depending on the circumstances. However, an experienced consumer law attorney will know how this is handled.
If you have any questions regarding your home improvement contractor, the purchase of your car or any other potential consumer fraud matter, contact this office for an initial consultation.