The New Jersey Consumer Fraud Act has been the focus of several news stories this week since a state court judge issued a ruling that will allow a CFA-based lawsuit over “gay conversion therapy” to move forward.
“New Jersey’s Consumer Fraud Act is very broadly applied since there is no definition of ‘fraud’ or ‘consumer’ in the Act itself,” said Marcus Rayner, the president of the New Jersey Civil Justice Institute. “While this is the first case in the nation to examine conversion therapy in a consumer fraud context, this is not the first case in New Jersey broadening the application of the CFA to new situations. It is an ever expanding law”
Because it is being applied in so many different situations, the Institute urges the legislature to make some changes to the Act to ensure that the law is not being abused:
- Limit the CFA to transactions occurring in the State of New Jersey or to transactions with New Jersey residents.
- Require plaintiffs to prove that they relied on the misrepresentation when they purchased the product or service.
- Require consumers to ask for their money back or for the alleged fraud to be fixed prior to bringing suit.
- Limit the award of attorney’s fees and costs to those fees reasonably attributable to the CFA claim.
- Allow the court discretion in awarding treble damages, as is common in other states.
- Limit the CFA’s applicability against industries that are already subject to the Federal Trade Commission and other regulatory structures.