Your Shield and Sword Against Unfair Business Practices

Your Shield and Sword Against Unfair Business Practices

by Evan Labov

 

Most of us are familiar with the Latin maxim “caveat emptor,” translated as “buyer beware”. While that admonition remains good advice to live by, it no longer accurately describes the law in the State of New Jersey. Today, New Jersey consumers enjoy extraordinarily broad protection against improper business practices by way of the New Jersey Consumer Fraud Act. Indeed, practitioners have referred to the Act (1) as being “among the broadest and most consumer-friendly in the country” (2), and the New Jersey Supreme Court has instructed that the Act must be “liberally construed in favor of consumers... to protect the public even when a merchant acts in good faith.” (3)

The Act’s exceptional protections are primarily the product of four factors:

 

  1. The Act protects consumers against three different categories of improper conduct: affirmative acts (e.g. making an intentional misrepresentation), knowing omissions (e.g. failing to disclose important information), and violations of a plethora of regulations. (4)

  2. The Act governs the behavior of an extremely wide array of “merchants” well beyond retailers of goods (e.g. home contractors, realtors and brokers, vehicle dealers, providers of consumer credit, auto repair shops, internet dating services, and residential landlords). (5)

  3. Business entities are generally protected when they act as consumers. (6)

  4. The Act provides a variety of very strong remedies to plaintiffs including mandatory costs and attorneys’ fees where a violation is demonstrated, mandatory awards of three times the amount of plaintiffs’ actual damages, and injunctive relief. (7)

The message is clear for individuals and businesses alike, while “caveat emptor” is sound advice, consumers need not sit back and feel helpless when they have been intentionally or unintentionally wronged. In New Jersey, more often than not, consumers are protected and “merchants” are advised that they face severe consequences if they fail to conduct their businesses honestly and in conformance with applicable statutes and regulations.

1. N.J.S.A. 56:8-1 et seq.
2. Jeffrey T. LaRosa and Cynthia L. Flanagan, New Jersey Courtsí Liberal Interpretation of Consumer Fraud Act Claims Also Governs the Courtsí Review of Attorneysí
Fees Claims Under the Act, 274-Feb N.J. Law. 12 (February 2012).
3. See Cox v. Sears Roebuck & Co., 138 N.J. 2, 15-16 (1994) (emphasis added).
4. Cox, 138 N.J. at 17.
5. Cox, 138 N.J. at 19 (home contractors); Gennari v. Weichert Co. Realtors, 148 N.J. 582, 607-08 (1997) (realtors and brokers); In re Johnny Popper, Inc.,
413 N.J. Super. 580, 582 (App. Div. 2010) (vehicle dealers); Lemelledo v. Beneficial Mgmt. Corp. of America, 150 N.J. 255, 256 (1997) (providers of consumer credit);
Scibek v. Longette, 339 N.J. Super. 72, 77-79 (App. Div. 2001) (automobile repair facilities); N.J.S.A. 56:8-171 (internet dating services);
N.J.A.C. 13:45a-25.1 et seq. (health clubs); Heyert v. Taddese, 431 N.J. Super. 388, 413-414 (App. Div. 2013) (residential landlords).
6. See Kavky v. Herbalife Intern. of America, 359 N.J. Super. 497, 504-05 (App. Div. 2003).
7. N.J.S.A. 56:8-19.

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