The New Jersey Consumer Fraud Act (“NJCFA”) was originally intended to protect New Jerseyans against deceptive business practices. However, since it was enacted in 1960, the NJCFA has been amended by the Legislature and expanded by the Judiciary numerous times and has morphed into something else altogether. The NJCFA’s current complexity and lack of clarity, combined with the promise of triple damages and attorneys’ fees for successful claimants, has made the law a magnet for aggressive lawsuits by attorneys seeking outsized settlements and verdicts against businesses operating in good faith.
Many of these lawsuits are based on technical violations of the law and are of questionable social value. Still, their hefty costs are passed on to consumers in the form of higher prices, fewer innovations, lower wages, and less job creation. These lawsuits also clog our courts, increasing the cost of government.
NJCJI works to educate legislators about this important problem and intervenes when new legislation seeks to further expand the NJCFA to include more conduct that has nothing to do with actual fraud or the State of New Jersey. NJCJI supports the following reforms to restore the NJCFA to its original purpose of protecting consumers without harming our economy:
- Require consumers to ask for their money back or for the alleged fraud to be fixed prior to bringing suit;
- Allow the court discretion in awarding treble (aka triple) damages, as is common in other states;
- Require plaintiffs to prove that they relied on the misrepresentation they are suing over when they purchased the product or service;
- Limit the NJCFA to transactions occurring in the State of New Jersey or to transactions with New Jersey residents;
- Limit the award of attorney’s fees and costs to those fees reasonably attributable to the NJCFA claim; and
- Limit the NJCFA’s applicability against industries that are already subject to the Federal Trade Commission and other regulatory structures.