3 Ways Companies Violate the NJ Consumer Fraud Act
The New Jersey Consumer Fraud Act (CFA) is one of the strongest consumer protection statutes in the nation aimed at punishing merchants for their deceptive and unfair business practices. Despite its comprehensive nature, companies often violate the CFA in several ways. Here, we’ll explore three common types of violations: misrepresentations, knowing omissions, and regulatory breaches.
1. Misrepresentations
Misrepresentations occur when a company provides false or misleading information about its products or services. These can be either intentional or unintentional.
a. Intentional Misrepresentations involve deliberate deceit. For instance, if a contractor tells you they will be using a certain quality of product which has certain features, when they actually use a lower quality product or the same product which does not have those specified features, knowing full well that the claims are false, this constitutes an intentional misrepresentation. This is often seen in cases where companies make exaggerated claims about the efficacy or quality of their goods, aiming to deceive consumers into making a purchase.
b. Unintentional Misrepresentations happen when a company makes a false claim without malicious intent but due to negligence or lack of due diligence. For example, a company might promote a product based on outdated information or inaccurate data. Even though this may be merely a mistake, it is still considered consumer fraud in NJ.
2. Knowing Omissions
Knowing omissions involve a company deliberately withholding important information that would influence a consumer’s purchasing decision. Unlike misrepresentations, these violations are characterized by a failure to disclose rather than providing false information.
For instance, if a company sells a car but intentionally fails to disclose that it has been involved in major accidents or has hidden defects, this is a knowing omission. The company is aware of the critical information but chooses not to share it, thereby misleading consumers who would have made a different decision had they been aware of the full picture.
3. Regulatory Violations
Regulatory violations occur when a company fails to comply with specific regulations set forth by consumer protection authorities. These regulations are designed to ensure fair practices and protect consumers from harm.
An example of a regulatory violation might include a company that neglects to adhere to labeling requirements for food products. If a company does not provide necessary allergen information or mislabels ingredients, it not only breaches FDA regulations but also violates the CFA by misleading consumers about the safety of their products.
Another example is a home improvement contractor failing to include in their contracts and invoices specific information and specific language which is required by the Home Improvement Practices Regulations. FYI, even well-established contractors often fail to include everything necessary in their contracts.
What does this mean for NJ consumers?
The New Jersey Consumer Fraud Act is an extremely powerful tool for safeguarding consumer rights and ensuring fair business practices. Understanding the ways companies might violate the CFA—through misrepresentations, knowing omissions, and regulatory breaches (among others)—empowers consumers to better protect themselves and seek recourse if they encounter deceptive practices. By holding businesses accountable for these violations, New Jersey reinforces its commitment to maintaining a marketplace built on trust and transparency.
Importantly, the CFA mandates that a company who is found to have violated the CFA pays the consumer’s attorney fees for prosecuting the action. In other words, if you bring a successful action under the CFA against a company, they will pay your attorney’s fees for you! So, if you believe you are a victim of a company who has violated the CFA, give RHG Law a call for a free consultation.