The Consumer Fraud Act (CFA) is a New Jersey regulation which prohibits merchants from using deceptive means to sell an item to a consumer.
Specifically, the act states that any:
“use or employment by any person of 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, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice…”
Given the various situations and sectors this could apply to, this article will help you navigate some of what the CFA says and how it may impact you.
The Consumer Fraud Act makes clear that this regulation is not to be applied to newspapers, news sources, or other publications which contain unlawful advertisements where the owners of those publications had “no knowledge of the intent, design or purpose of the advertiser.” Moreover, real estate brokers are exempt from claims under the CFA by a plaintiff if the broker is able to prove that they “had no actual knowledge of the false, misleading or deceptive character of the information” and they made a reasonable attempt to ascertain whether the information is true or false. As a result, it seems consistent that key factors in determining whether consumer fraud has taken place are intent and knowledge of the fraudulence.
Some specific instances of unlawful business practices that fall within this statute are conducting business operations in a manner that presents itself as a government agency, scheming to not sell an item at the advertised price, advertising an assembled item but selling it unassembled (without proper notation), soliciting funds under the false representation that said funds are going towards a charitable cause, and misrepresenting the identity of food. In continuation, conducting business under a misrepresented location or assumed name is declared to be unlawful under the CFA.
The CFA applies to any case where a deceptive sale takes place. The CFA does, however, explicitly list some industries such as real estate sales, internet dating agencies, banks, ticket resellers, kosher and halal foods, home appliance repairs, telemarketing and telecommunications, information security, and pet purchases (known as the Pet Purchase Protection Act). Another provision within the CFA concerns industrial hygiene and is known as the Industrial Hygienist Truth in Advertising Act which mandates that those who present themselves as industrial hygienists have relevant qualifications. Therefore, it is unlawful for a person to claim to be a certified industrial hygienist (CIH) or a CIH in training (CIHIT) without proper certification. For businesses that identify as employment agencies, the CFA requires them to be licensed in the state of New Jersey and cannot use deceptive advertising that misleads their customers. The agency also cannot charge a job seeker prior to finding them a job. For health clubs, the CFA requires health club contracts to be in writing. For the auto industry and car dealerships, the CFA regulates leases, sales, financing, and repairs of vehicles, and restricts lying about the terms of financing, lying about warranty, rolling back the odometer, switching VIN numbers, and the use of any otherwise misleading advertising.
With regards to violation consequences, the CFA mandates that any business establishment which violates the provisions of the law are liable to refund all money that was acquired as a result of the unlawful practice. Additionally, the statute allows for treble damages, which allows the court to triple the awarded damages.
In order to have a claim under the Consumer Fraud Act, the consumer must prove that the following three elements have been met: 1) there must have been unlawful conduct by the merchant, 2) there was an ascertainable loss, and 3) there is a causal relationship between the merchant’s unlawful conduct and the consumer’s ascertainable loss.