New Jersey’s Consumer Fraud Act (the “CFA”) is one of the broadest, strongest, and most far-reaching consumer protection laws in the country. The CFA states that it is unlawful for any person to use any unconscionable commercial practice in the sale of any goods, services, or even real estate in some cases.
The New Jersey Legislature enacted the CFA in 1960. Amendments in 1971 expanded the Act’s reach and purpose and included provisions to allow for individuals to bring private lawsuits rather than only allowing public actions by the Attorney General. However, the State still plays a significant part in enforcing the Act, led by the New Jersey Division of Consumer Affairs, Office of Consumer Protection.
In the attempt to encourage private actions and reduce the burden to the State in enforcing the CFA, the Act included the ability for claimants to recover treble (triple) damages, reasonable attorneys fees, and litigation expenses. This was done so that even those with little means to bring an action could recover their losses no matter how small, and, in the process, the punitive nature of the damages would further discourage those who would otherwise be tempted to use deceitful or fraudulent practices against others.
Since the CFA is a remedial piece of legislation courts tend to interpret the Act’s language very broadly with the aim of providing the most consumer protection. However, the CFA does have some limits and generally will not apply to claims such as denial of benefits by insurance companies, claims regarding employee benefit plans covered by the Employee Retirement Income Act (“ERISA”), claims regarding hospital services, employment claims, or claims against the government, public utilities, or licensed professionals. “Licensed professionals” typically include accountants, insurance agents, architects, doctors or other professionals where the claimant could have alternative options for recourse such as through malpractice claims.
An individual person can bring a claim under the Consumer Fraud Act , as can a trust or business entity or the legal representative, agent, employee, partner, officer, director, member, stockholder, associate, or trustee of one of those entities. Also, the claimant must suffer an ascertainable loss of money or property resulting from some fraudulent or deceitful act – or even an intentionally misleading omission in some cases – and must have a sufficient stake in the subject matter of the litigation.
An “ascertainable loss” is harm which can be calculated within a reasonable degree of certainty. It cannot be merely possible, potential, or theoretical and there must be a causal connection between the loss and the unlawful practice alleged. However, the fraud also does not need to be the sole cause of the loss.
Actionable misconduct under the CFA includes not only affirmative acts such as fraud, false promises, misrepresentations, and other unconscionable commercial practices but also knowing omissions, such as a knowing concealment or suppression of any material fact with the intent that others are relying on the omission.
Also, while the purpose of the Act initially focused mostly on protecting uneducated consumers, many others may have valid claims under the CFA. In fact even businesses buying goods and services may bring a claim under the Act. However, although the language of the CFA theoretically could apply to all merchandise and services, regardless of the intended uses of such or the buyer’s identity, courts have, at times found that purchasers of wholesale goods for resale are not consumers within the meaning of the Act and therefore they cannot bring a CFA claim. Ultimately, this is a case-by-case analysis to determine applicability of the Act rather than a hard-line rule.
The attorneys at McLaughlin & Nardi, LLC are experienced in litigating claims involving New Jersey’s Consumer Fraud Act. To learn more about what we can do to help, please visit our website or contact one of our lawyers at (973) 890-0004.