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• CONSUMER FRAUD LAW IN BERGEN, PASSAIC AND MORRRIS COUNTIES: CONSUMER SAFEGUARD IN DOOR-TO-DOOR TRANSACTION.
• ATTORNEY FEE-SHIFTING OPPORTUNITIES IN NEW JERSEY
• COMPLEX CIVIL LITIGATION IN BERGEN AND PASSAIC: THE RELATIONSHIP BETWEEN THE STATUTE OF LIMITATIONS AND THE DOCTRINE OF LACHES
• New Jersey's Dram Shop Statute: A Help or Hindrance?
• New Jersey Home Improvement Contractor's Legal Handbook

New Jersey's Consumer Fraud Act: The Big Hammer

NEW JERSEY’S CONSUMER FRAUD ACT:
THE BIG HAMMER

New Jersey’s Consumer Fraud Act. (CFA) was initially conceived to permit the government “to combat the increasingly widespread practice of defrauding the consumer.” It was amended in 1971 to give New Jersey one of the strongest consumer protection laws in the nation. The CFA is aimed at unlawful sales and advertising practices designed to induce purchasers to buy merchandise and real estate.
The CFA provides a specific cause of action to the consumer, where treble damages are mandatory if an ascertainable loss is determined. It also allows for a recoupment of attorney fees and other litigation costs, irrespective of whether an ascertainable loss has been proven and without regard to the amount involved in the underlying dispute. Notably, in effectuating its terms, a court should liberally construe the statute in favor of the consumer.

Although the CFA was initially conceived to assault “sharp practices and dealings” that victimize a consumer through fraudulent and deceptive means, it is no longer aimed solely at “shifty, fast talking and deceptive merchants.” Indeed, it is designed to protect the public, even when the merchant acts in good faith or even if the merchant is merely negligent. In the plain language of the statute, conduct can be unlawful even if a person has not been misled or deceived. Actual reliance on the unlawful conduct is not required, even where an independent investigation relating to the illicit conduct has been conducted i.e. the fact that the consumer conducted an independent investigation as a home-builder’s qualifications is no defense.


The core concept of the CFA is an “unlawful practice.” It is the “capacity to mislead”, which is at the heart of the definition of “unlawful practice.” An unlawful practice falls into three distinct categories: (A) affirmative acts; (B) knowing omissions; and, (C) regulatory violations.


A. Affirmative Act Violation

When the “unlawful practice” is comprised of an affirmative act, it is not necessary for the consumer to prove that the wrongdoer intended to commit an unlawful act. Stated differently, the merchant’s intent is irrelevant to the violation.

An affirmative-act violation under the CFA can include the following:

• “Unconscionable Commercial Practice” means an activity or conduct that is basically unfair or unjust, which materially departs from standards of good faith, honesty and fair dealings.
• “Deception” means conduct or an advertisement that is misleading to an average consumer. The core of deceptive activity is whether the conduct or advertisement had the mere capacity to mislead.

•. “Fraud” means a perversion of the truth, a misstatement, a falsehood, communicated to another person creating the mere possibility that other person will be cheated” (emphasis supplied).

•. “Misrepresentation” means a false statement that relates to an important or significant fact regarding the transaction, Liability will attach if the statement creates the mere possibility that the other person will be misled.


B. Knowing Omission Violations
The second type of unlawful practice, the “knowing omission,” consists of, among other things, the following concepts:

• “Concealment” means to hide or withhold something from another. Here, the actor usually has a duty to reveal or disclose the information.

• “Suppression” means to consciously attempt to control or conceal unacceptable impulses, thoughts, feelings or acts.
In this category of “unlawful practice”, knowledge and intent are necessary elements of the offense. A person acts “knowingly” if he/she is virtually certain that the conduct will produce a specific result.
C. Regulatory Violations


A violation of a regulation created by New Jersey’s Administrative Code imposes strict liability, against the merchant. Intent or moral culpability is not relevant, nor is good faith an excuse. A technical violation of the regulation is enough to create liability.

Some of the areas where administrative regulations exist to control the conduct of the merchant are: (1) home improvement work; (2) automobile sales and repairs; (3) the sale of animals; and, (4) advertisements relating to consumer goods.

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