WHAT IS AN “AFFIRMATIVE ACT” UNDER THE NEW JERSEY CONSUMER FRAUD ACT?

Under the New Jersey Consumer Fraud Act, “affirmative act” is a term used to describe a particular type of violation of the law.  New Jersey Consumer Fraud Act prohibits merchants from committing certain conduct.  In this context, “affirmative act” means:

·         something done voluntarily by a person;

·         whether physical acts; or

·         steps taken voluntarily by a person

·         to advance a plan or design; or

·         to accomplish a purpose.

The New Jersey Consumer Fraud Act prohibits merchants from committing the following types of affirmative acts in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of a contract:

·         “Unconscionable commercial practice:”

o    an activity in the public marketplace;

o    that is basically unfair or unjust;

o    that materially departs from standards of good faith, honesty in fact and fair dealing;

            Factual dishonesty and unfair dealing are the telltale signs of unconscionable commercial practices.

·         “Deception:”

o    conduct or an advertisement;

o     misleading to an average consumer to the extent that it is capable of, and likely to, mislead an average consumer. 

            The capacity to mislead is the telltale sign of deception.  It does not matter if:

o    at a later time, the conduct or advertisement was capable of explanation to a more knowledgeable and inquisitive consumer; or

o    the conduct or advertisement actually misled claimants ; or

o    the merchant acted in good faith.

·         “Fraud:”

o    a perversion of the truth; or

o    a misstatement; or

o    a falsehood;

o    communicated to another person; and

o    creating the possibility that that other person will be cheated.

·         “False pretense:”

o    an untruth;

o     knowingly expressed by a wrongdoer.

·         “False promise:” 

o    an untrue commitment or pledge;

o    communicated to another person;

o    to create the possibility that that other person will be misled.

·         “Misrepresentation:”

o    an untrue statement;

o    made to deceive or mislead;

o     made about a fact which is important or significant to the sale/advertisement;

o     communicated to another person ;

o    to create the possibility that other person will be misled.

There are limits to the types of affirmative misrepresentations that support New Jersey Consumer Fraud Act Violations.  For example, when the New Jersey Consumer Fraud Act dispute involves an advertisement, the New Jersey Consumer Fraud Act does not apply to owners or publishers of newspapers, magazines, publications or printed matter wherein such advertisement appears or to the owner or operator of a radio or television station which disseminates such advertisement when they have no knowledge of the advertiser’s intent, design or purpose.

IF A MERCHANT COMMITS AN AFFIRMATIVE ACT, PROOF OF AN INTENT TO MISLEAD OR THAT THE CONSUMER WAS MISLED IS UNNECESSARY TO PROVE A NEW JERSEY CONSUMER FRAUD ACT VIOLATION

Under the New Jersey Consumer Fraud Act, liability for an affirmative act does not require:

·         proof that the merchant intent to commit a violation of the New Jersey Consumer Fraud Act. 

·         proof that a consumer was in fact misled or deceived by the merchant’s affirmative act which violates the New Jersey Consumer Fraud Act.

Where there is no proof that the merchant committed actual fraud or deceit, it is the capacity to mislead that establishes a New Jersey Consumer Fraud Act violation.  To constitute a violation of the New Jersey Consumer Fraud Act, the merchant’s business practice must be misleading and beyond reasonable business practices and thereby victimize average consumers.    

WHAT TYPES OF CONDUCT ARE “UNCONSCIONABLE COMMERCIAL PRACTICES” UNDER THE NEW JERSERY CONSUMER FRAUD ACT?

1. Intentionally changing an automobile odometer.
2. Failing to sell a product as it is advertised
3. Failing to sell a product at its advertised price.
4. Sale of lifetime memberships when the merchant knows that the longest contract that the merchant has with any of its vendors is only 10 years long.
5. In the sale of franchises mass marketed to the public, the failure to provide a franchisee with an Federal Trade Commission disclosure statement.
6. Charging rents higher than permitted under a rent control ordinance.
7. Charging customers who enter into a rent to own contract an interest rate above limits set by law.

WHAT TYPES OF CONDUCT ARE “UNCONSCIONABLE”, “DECEPTIVE” OR “FRAUDULENT” OR CONSTITUTE “FALSE PRETENSES”, “FALSE PROMISES” OR “MISREPRESENTATIONS”?

·         charging an unreasonably high price that can’t be negotiated for merchandise that isn’t very valuable to the consumer.

·         giving “firm” prices for the completion of work and later billing over twice the amount of those “firm” prices.

·         A realtor’s describing an inexperienced builder with a history of poor workmanship as being known for his attention to detail and craftsmanship, having built hundreds of homes and being one of the best builders in New Jersey.

WHEN ARE STATEMENTS “AFFIRMATIVE MISREPRESENTATIONS” UNDER THE NEW JERSEY CONSUMER FRAUD ACT?

The New Jersey Consumer Fraud Act applies to oral misrepresentations and written misrepresentations.   However, not every incorrect statement will support a New Jersey Consumer Fraud Act violation.  To constitute an “affirmative misrepresentation” under the New Jersey Consumer Fraud Act, the statement must be: 

·         a statement of fact made when the parties formed their bargain;

·         material to the transaction;

·         made to induce the buyer to make the purchase; and

·         found to be false.

But it is not always necessary that the consumer receive the misrepresentation to have a valid New Jersey Consumer Fraud Act Claim.  For example, what if the misrepresentation is made to someone acting as the consumer’s agent and the misrepresentation deceived that agent into entering into a contract with the merchant?  

A statement is material to the transaction if:

• the statement is made at the time a bargain is struck and not thereafter; and
• a reasonable person would attach importance to its existence in determining a choice of action; or
• the maker of the representation knows or has reason to know that its recipient regards or is likely to regard the matter as important in determining his choice of action, even though a reasonable person would not so regard it.  

The statement must be made at the same time the bargain is formed -- otherwise, the statement isn’t made to induce a buyer to make a purchase.   Where a merchant makes statements to prospective purchasers to convince them to buy something, those statements may be sufficient to support a New Jersey Consumer Fraud Act violation. 

The following are examples of statements that may violate the New Jersey Consumer Fraud Act:

·         Advertisement for consumer financial help services where the merchant provided no meaningful assistance but instead charged consumers approximately $200 just for referring the consumers to a bankruptcy attorney, when the consumers could receive such referrals for free from other services.

·         An automotive dealership’s using the term “dealer invoice” in an automobile advertisement, when the term had no clear meaning to the average consumer.

·         Advertisement describing windows as “insulated aluminum windows” could be found misleading to the average consumer when describing windows with insulated glass and uninsulated aluminum frames.

·         Contact lenses advertisement failing to explain that additional professional services not included in the advertised price were required for most customers.

• A cell phone service provider’s advertisement that its wireless service was so reliable that "you

can make your wireless phone your only phone."

• A drugstore chain’s advertisement claiming "the lowest and best prices" on pharmaceuticals and a best-price guarantee to "meet or beat" its competitors' prescription prices, when the chain encouraged its pharmacists to charge more than the chain’s stated retail price to customers that were unlikely to challenge the prices.

• A real estate agent’s claim that a property’s termite problem was “minimal” when in fact there was proof that the problem was severe.

• A real estate broker’s misrepresentation about the neighborhood where a home for sale was located. 

• A real estate broker’s misrepresentation that a certificate of occupancy satisfied a city’s certificate of land use requirement for a multi-family property located in a single family zone.

• Representations by a distributorship seller that:  (1) many of its distributors earned "this kind of money ($50,000) and more," while none of the seller’s distributors ever achieved annual retail sales commissions above $50,000; and (2) distributors were "working far less hours than the average woman and earning far more" when in reality the seller had no marketing experience or the independent study results to support the claim.

• A home health care service’s brochure claiming its "reliable employees" would "assist with washing, dressing and helping individuals as needed" and would "provide friendship [and] someone to talk to and be there" when the primary caregiver was unable to do so and that "[a]ll employees [were] supervised and a close relationship [was] maintained between [the] employees, clients, client's families, and [Live-In Companion's] administration."

WHAT KIND OF STATEMENTS FAIL TO SUPPORT NEW JERSEY CONSUMER FRAUD ACT CLAIMS (PUFFERY)?

New Jersey Courts distinguish between mere puffery and misrepresentations violating the New Jersey Consumer Fraud Act.  For example, the following statements did not support New Jersey Consumer Fraud Act violations:

• A boat seller’s claim that the boat was “good” when in fact the boat had undergone engine repairs before it was sold and without the seller’s knowledge.
• “You're in good hands with Allstate."
• A pharmaceutical company’s advertisement for allergy medication stating that a person could “lead a normal nearly symptom-free life again.” 
• a vehicle’s satellite navigation system failing to provide the claimant with directions that was advertised with the statement “if there's a road that goes there, the s-class can show you the way.”   

DOES THE LAW OFFICE OF PAUL DEPETRIS HAVE EXPERIENCE HANDLING NEW JERSEY CONSUMER FRAUD ACT DISPUTES?

Yes.  Paul DePetris has performed the following tasks:

·         represented consumers, home buyers, home sellers, home repair customers, home repair contractors, home inspectors, real estate brokers, real estate agents, junk yard dealers, automobile purchasers and owners, new and used car dealers, banks and automotive lenders, boat purchasers and owners, watercraft purchasers and owners and marinas in New Jersey Consumer Fraud Act  disputes.

·         appeared in court in cases involving New Jersey Consumer Fraud Act disputes.

·         mediated, arbitrated and tried New Jersey Consumer Fraud Act cases.

Mr. DePetris has appeared before the Superior Court of New Jersey in the following counties:

Mr. DePetris has also appeared in federal courts - the District of New Jersey in Camden, Trenton and Newark and in the Eastern District of Pennsylvania.

Mr. DePetris is also the author of the following publications:  New Jersey Consumer Fraud Act & Forms (New Jersey Law Journal Books, 2007); Learned Professionals, Licensed Semiprofessionals and the Consumer Fraud Act:  The Origins of the Licensed Professionals’ Doctrine (New Jersey Lawyer, Oct. 2008); and Liability For Consumer Fraud In Real Estate Transactions (New Jersey Law Journal, March 18, 2009).   Mr. DePetris also gives seminars on the New Jersey Consumer Fraud Act.

WHAT IF I DON’T HAVE ENOUGH MONEY TO HIRE AN ATTORNEY TO HANDLE MY CASE FROM BEGINNING TO END?

In many situations, the Law Office of Paul DePetris offers alternatives to handling cases for an hourly fee, such as by offering to prepare the court paperwork for you or helping you handle your claim by yourself.  Such flexible methods may allow you to keep the amount legal fees you spend on your case to a fixed sum, while providing you the help you need to handle your case.  For a no cost phone consultation about what the Firm might be able to do for you, call or write an email to Mr. DePetris at:  609-714-2020 or consumerlaw@newjerseylemon.com.