By Marcus Rayner | New Jersey Law Journal
The Legislature enacted the Consumer Fraud Act in 1960, at a time when only the attorney general could sue to enforce its provisions.
Your May 23 editorial “Consumers Buy Goods, Not Lawsuits” underscores the need to clarify contradictory provisions of New Jersey’s Consumer Fraud Act. The current elements of liability under the statute are subject to considerable confusion and debate by the courts, which largely arises out of the statute’s drafting history.
The Legislature enacted the Consumer Fraud Act in 1960, at a time when only the attorney general could sue to enforce its provisions. It stated that an unlawful act occurs “whether or not any person has in fact been misled, deceived, or damaged thereby” with the intention of allowing the attorney general to bring immediate action against an offender without first having to find a victimized consumer or wait until a consumer had been harmed. The CFA was later amended in 1971 to allow aggrieved consumers a private cause of action, specifying that a consumer needed to plead and prove they suffered an “ascertainable loss” as a result of the unlawful act in order to have standing. Nevertheless, plaintiffs have since argued for a right of recovery even when they themselves were not deceived or defrauded.
A bill pending in Trenton, A-3333/S-2855, clarifies that a private plaintiff must plead and prove detrimental reliance upon the false statement or deceptive sales practice alleged. It specifies that the CFA is intended to afford a right to recover to consumers who are deceived to their detriment, as a plaintiff would have to do under the common-law fraud analog to the act.