Last week we announced that a bill had been introduced in the New Jersey Assembly that would make important changes to our state’s oft-abused Consumer Fraud Act. This week we are happy to announce that a companion bill, S1669, has been introduced by Senators Oroho (R-Sparta) and Van Drew (D-Cape May Court House).
We live in such partisan times that is refreshing to see legislation like this attracting bi-partisan support. Similar reform efforts have, in the past, been smeared as partisan and anti-consumer, but the truth is this is non-partisan, pro-common sense legislation.
These bills would retain the ability of defrauded consumers and the State to go after businesses that commit fraud, while making some common sense changes that give the courts the ability to make the penalty fit the crime:
- 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 CFA 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 CFA claim.
- Limit the CFA’s applicability against industries that are already subject to the Federal Trade Commission and other regulatory structures.
These changes would go a long way towards protecting businesses from abusive lawsuits, but would in no way diminish the New Jersey’s ability to seek out and punish true fraudsters.