New Jersey Consumer Fraud Act

How does New Jersey protect consumers?

In the face of efforts to weaken federal protections for consumers, the New Jersey has stepped up efforts to build and enforce protections for consumers within its own borders. The Attorney General’s office has created its own state-level version of the Consumer Financial Protection Bureau, and New Jersey’s Consumer Fraud Act (NJ CFA) is among the broadest consumer protection laws in the nation.

What does the NJ CFA do?

The NJ CFA goes beyond simply providing a way for consumers to recover the amounts they’ve lost as a result of deceptive business practices. Successful plaintiffs can recover triple damages in addition to attorney fees. As a result, more consumers can pursue fraud claims without suffering economic hardship, and the threat of substantial penalties helps deter businesses from unlawful practices.

What kinds of business practices does the NJ CFA cover?

The text of the law details several types of prohibited behaviors. NJ CFA describes “unlawful business practices” as “any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate.[1] In short, it’s illegal for businesses to actively deceive consumers or withhold material information from them for the purpose of making a sale.

The law goes on to detail several scenarios that constitute unlawful business practices as described above:

• Operating “under a name or in a manner which wrongfully implies” the business is associated with any branch of state, federal, or local government (this includes using symbols or formatting that mimic those used by governmental agencies)
• Schemes to not sell advertised items at the advertised price (commonly known as “bait and switch”)
• Advertising schemes that notify consumers that they have won a prize and requiring them to take some action (such as making a purchase or submitting to a promotion effort) to claim it
• Using pictures of assembled merchandise to advertise unassembled products
• Failure to clearly label products with their full sale price
• Falsely leading consumers to believe that sales or donations will support a charitable organization
• Advertising more than one “going out of business” promotion in a 360-day period or running such a sale for longer than 90 days
• Misrepresenting the identity of food products in eating establishments
• Failure of retail businesses to “conspicuously post” their refund and raincheck policies

This list does not limit the possible applications of the act but clearly outlines specific practices that it intends to cover. The New Jersey Department of Consumer Affairs, which issues regulations for applying the CFA, has announced initiatives targeting predatory and fraudulent student lending, banking and securities fraud, online privacy violations, and more.

In August 2023, New Jersey Gov. Phil Murphy signed an amendment to the act that’s designed to “protect veterans and their families from unscrupulous individuals who would take advantage of them by overcharging” for help cutting through red tape that’s involved with claiming the benefits they have earned through their service. Additionally, the state’s Attorney General Matthew J. Platkin announced in late September 2023 that New Jersey had joined a suit against Amazon by the Federal Trade Commission and sixteen other states. The suit claims Amazon uses deceptive business practices to gain a monopoly and prevent fair competition.

How does enforcement work?

The NJ CFA empowers the state attorney general’s office to investigate violations and impose penalties under the act. In addition to the suit mentioned above, the Division of Consumer Affairs recently announced a $1.2 million settlement with Dollar General. The agency pursued action against the retail chain after inspections revealed a pattern of discrepancies between labeled pricing and the amount demanded at the register. However, individuals can hire private attorneys to pursue individual claims. If successful, they can recover 300% of their losses in addition to reasonable costs associated with the suit, including attorney’s fees.[2]

How do I start a lawsuit under the NJ CFA?

In any court matter, your interests are best served by enlisting the assistance of a trusted lawyer. If you believe you have suffered an ascertainable loss due to deceptive or unlawful business practices, contact a New Jersey attorney with experience in consumer fraud claims. They can consult with you to determine whether your claim is likely to succeed and then put together the best possible case based on their experience and deep understanding of this area of law.

The Mark Law firm provides representation for consumer fraud claim, including a no-cost initial consultation. To learn more about how our firm helps protect the rights of New Jersey residents, check out our news page.

[1] N.J.S.A 56:8–2

[2] N.J.S.A. 56:8–19.