Consumer Fraud



The New Jersey Consumer Fraud Act

The New Jersey Consumer Fraud Act extends some of strongest protections against consumer fraud act in the nation. It protects consumers from sales fraud of all types, from fraud in car sales, to fraudulent sales of consumer goods, to deceptive practices by contractors.

The Consumer Fraud Act prohibits merchants, sales people and contractors from using deceptive practices in the sales of goods or services to consumers. The deceptive practice need not be explicit - it can be an omission of information. False information need not even be intentionally deceptive if it had the effect of misleading the consumer.

Almost any deceptive sales practice can violate New Jersey's Consumer Fraud Act, including business to business sales - businesses can be consumers too.  The Consumer Fraud Act can protect businesses which are consumers as well as people. If a New Jersey business is a consumer of goods and services, it is protected by the Act as well.

New Jersey's Consumer Fraud Act has teeth.  If a merchant is found to have violated the Act, it will have to pay the consumer three times the damages and pay her attorneys fees and litigation costs.

The New Jersey Department of Consumer Affairs Consumer Fraud Regulations

The New Jersey Department of Community Affairs (the "DCA") issues regulations applying the Consumer Fraud Act. Many industries are covered by these regulations, and our attorneys have litigated over them. For instance, our attorneys have litigated violations by car dealerships in Montclair, Freehold, and Union, New Jersey. We have litigated cases where a vehicle's history was changed, concealed fees were charged, airbags were removed, where cars were used by dealership employees when in for repairs, and when vehicles were lost by a dealership.


Consumer Fraud In Particular Industries

  • Consumer Fraud in the Auto Industry.  New Jersey’s Consumer Fraud Act applies to sales, leases, financing and repairs of automobiles.  Additionally, the Department of Community Affairs has issued detailed regulations which auto dealers must comply with.  Any deceptive practice or violation of these regulations can be grounds for a consumer fraud claim examples include:
o    Lying about the terms of financing
o    Using “bait and switch” advertising tactics
o    Selling a damaged or defective automobile
o    Lying about the vehicle’s warranty
o    Lying about the repair history or condition
o    Lying about the price, including using hidden
      or  undisclosed fees
o    Charging excess fees (higher fees than were
      actually incurred)
o    Misrepresenting the price of a vehicle in
      an  advertisement
o    Misleading advertisements or statements
o    Odometer rollbacks and VIN switches

  • Consumer Fraud in the Home Improvement Industry. The NJ DCA has strict regulations governing home improvement contractors.  Home improvement contractors who do not comply with these regulations are guilty of consumer fraud, entitling the homeowner to triple damages and reimbursement of their attorneys fees.  Some of the regulations are:
o    All home improvement contracts must be in writing
o    The contract must include the following
    The name and address of the contractor
    Start and stop dates
    A description of all work to be done
    A description of the supplies to be used
    All warrantees 
    The contractor’s license number with
        the DCA
    A copy of the contractor’s  
        general commercial liability policy
        and the insurance company’s
        phone number
    The total price, including fees and
        finance charges
    Specific language allowing
       for cancellation of the contract by
       the homeowner
       cancellation  of the contract and
        refund of  amounts paid
o    Specific acts or omissions by home
       improvement contracts also
       constitute consumer fraud,
       including these:
    Demanding final payment before the job is complete
    Misrepresenting the materials to be used on the job
    Failing to get permits, or beginning work
       before obtaining proper permits
    Make disparaging misrepresentations about
       a competitor
    “Bait and switch” sales tactics
    Failing to provide copies of the contract,
       insurance certificates or warrantees.
 
  • Health Clubs.   Consumer fraud laws and regulations also govern the conduct of health clubs.
o    Health club contracts must be in writing
o    The customer must be given a written copy of
       the contract
o    It must conspicuously contain the total price
o    The contract must state that a bond, irrevocable
       letter of credit or other security is filed with the DCA
o    The contract cannot be for more than three years
o    It must provide that the customer can cancel
      the contract within three days after signing and get
      a  refund
o    The contract must provide for cancellation upon
       the member’s death or permanent disability
o    It must provide that the customer can cancel if
      she moves more than 25 miles from the club or
      an affiliate
o    Members cannot be required to renew their contract
o    A health club cannot require or even accept more
      than a 25% down payment

  • Employment Agencies.  There are laws and regulations governing full-time and temporary employment agencies.  Violation of the rules governing temporary employment agencies can constitute "per se" violations of New Jersey’s Consumer Fraud Act.  Violations of any rules for permanent or temporary employment agencies may give rise to liability for consumer fraud depending on the circumstances.  These requirements include the following:
o    An employment agency must be duly licensed with
      the state of New Jersey.
o    It cannot use deceptive or misleading advertising
o    All contracts between the employment agency and
      a  job seeker must be in writing, and the agency
      cannot accept a fee without a written contract
o    The contract must clearly state that it gives
       no guarantees of employment
o    The contract must give the employee three
      calendar days to cancel
o    The contract must clearly state all fees and
      clearly describe the services to be provided by
      the agency
o    The agency must give the job seeker copies of
       every document she has signed
o    It must post how the fees to be paid by a job
      seeker are computed
o    The agency cannot charge a temporary employee
       fees for permanent employment unless a
       temporary position becomes a permanent one
       within 30 days
o    Job seekers cannot be charged more than 1%
       per day of the fee on the schedule per day if they
       were discharged without cause or quit with just cause
o    In any event, a job seeker who does not report
      for work or voluntarily quits without just cause
      within 30 days may not be charged more than 30%
o    An agency cannot charge a job seeker a fee prior
      to finding her a job
o    It cannot split fees paid by a job seeker with
      an employer
o    Agencies cannot charge fees when an employee
      has not accepted employment
 
  • Other Industries.  All deceptive sales acts fall under the purview of New Jersey’s Consumer Fraud Act.  However, certain other industries have been expressly included in the Consumer Fraud Act by statute or regulation.  These include real estate sales and services, internet dating agencies, banks and lending institutions, kosher and halal foods, pet purchases (frequently known as the “Puppy Lemon Law”), the service and repair of home appliances, personal information security, telecommunications, and information services.


McLaughlin & Nardi, LLC’s Consumer Protection Attorneys

We have a record of success in defending the rights of consumers who have been the victims of deceptive sales practices.  For example, our attorneys have litigated over the violations of the consumer fraud contractor regulations in Jersey City, Elizabeth, and West Paterson (Woodland Park). We have represented consumers when contractors have not used agreed upon materials, failed to give warranties, violated many of the technical requirements of the Consumer Fraud Act, misrepresented the cost or length of a job, stole deposits, and falsified start dates. Our attorneys have litigated in many other areas, such as the fees and security deposits allowed by the consumer fraud regulations governing gyms and fitness centers in Newark.



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