Defense of Consumer Fraud Act Claims
The New Jersey Legislature has passed the New Jersey Consumer Fraud Act. This well-intentioned piece of legislation seeks to protect consumers from retailers’and sellers’ products, which rely upon deceptive advertising or otherwise overstate the value or suitability of their products. However, the Act has taken on a life of its own and encroaches into many segments of our State’s commerce. From automobile sales to certain aspects of real estate transactions, the Consumer Fraud Act can impact many commercial transactions. The significance of this far-reaching Statute rests upon the remedies that it provides. A successful claimant under the Consumer Fraud Act can obtain an award of treble damages, which is triple the amount actually lost as a result of the conduct of a defendant. In addition, a successful claimant can also seek to have all of their attorneys’ fees paid. This shifting of the burden of paying attorneys’ fees can occur regardless of the size of the award to the claimant or plaintiff. As a result, a claimant on a Consumer Fraud Act Claim might only obtain an award of $5,000 but could pursue attorneys’ fees in the amount of $50,000.
The significant remedies awarded to successful plaintiffs under the Consumer Fraud Act make the Statute a trap for the unwary participant in business transactions covered by the Act. While the Consumer Fraud Act does not apply to every business transaction, its reach goes well beyond what many businessmen believe is reasonable. Beyond the Statute, the Division of Consumer Affairs has promulgated a substantial volume of regulation implementing the terms of the Act. If a business has been named this defendant in a lawsuit that alleges Consumer Fraud Claims, the attorneys for that business must assess the merits of the case very early on and strategize with the client over how to proceed. Relatively insignificant claims can result in substantial awards given the attorneys’ fees shifting provision. Accordingly, if you are served with a claim that alleges consumer fraud, you need to speak early on to an attorney who can evaluate whether the Act applies to the circumstances at issue.
The attorneys at Byrnes, O’Hern & Heugle have substantial experience litigating the terms and provisions of the Consumer Fraud Act. From defending automobile dealers, home improvement contractors and many small or medium sized businesses, our attorneys can provide sound advice to businesses confronting a Consumer Fraud Act claim.