The New Jersey Consumer Fraud Act was enacted in 1960 to protect New Jersey citizens against deceptive business practices. As one of the first consumer protection laws in the country, it served as the model for similar legislation in many other states.
The CFA was such an effective tool that the legislature and the courts greatly expanded its scope. Today, compliance with the CFA is burdensome, especially for New Jersey’s small businesses. As past lawsuits have demonstrated, the CFA is prone to abuse, incentivizes unnecessary litigation, and makes even technical violations extraordinarily costly to resolve.
Sen. Oroho (R-24) and Asm. O’Donnell (D-31) have recognized that it is time to adopt some basic, technical changes that will make the CFA less onerous while still providing strong protections to consumers. Senate Bill 2293 and its companion, Assembly Bill 3497, have been introduced in the New Jersey Legislature to do just that.
The bill would:
- Require plaintiffs to prove that they were aware of, and relied to their detriment on, an unlawful method, act, or practice when they purchased the product or service at issue;
- Limit the applicability of the CFA to transactions occurring in the State of New Jersey or to transactions with New Jersey residents;
- Limit the CFA’s applicability to actions and transactions not otherwise permitted or regulated by the FTC or any other federal regulator;
- 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 up to three time the amount of actual damages, as opposed to New Jersey’s current system of mandatory treble damages; and
- Prohibit the courts from awarding attorneys’ fees and court costs for “technical violations” of the CFA.
NJCJI strongly supports the common sense reforms embodied by this legislation.
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