NEW JERSEY CONSUMER FRAUD VEHICLE SALE FREQUENTLY ASKED QUESTIONS

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INTRODUCTION

This article discusses New Jersey Consumer Fraud vehicle sale frequently asked questions – questions about violations of a powerful consumer law that regulates the sale of cars by car dealers in New Jersey.

NEW JERSEY CONSUMER FRAUD VEHICLE SALE FREQUENTLY ASKED QUESTION #1

WHAT IS THE ACT?

Many of us have heard the Latin phrase caveat emptor: “let the buyer beware.” That statement allows little relief to a New Jersey consumer. That statement does not reflect current law in New Jersey. Here, we have a more ethical approach in business dealings with one another. Therefore, each of us may rely on representations made by another in a business transaction. This approach is reflected in the New Jersey Consumer Fraud Act – a law designed to protect consumers that purchase goods and services.

NEW JERSEY CONSUMER FRAUD VEHICLE SALE FREQUENTLY ASKED QUESTION #2

WHY IS THE ACT IMPORTANT TO CAR SALES AND LEASES?

New and used vehicle sales and leasing in the State often involve fraud committed by the car dealer. The customers of car dealers often purchase or lease expensive vehicles without adequate information about their rights or the dealer’s responsibilities. The New Jersey Consumer Fraud Act applies to new and used vehicle sales, requiring dealers to provide customers from specific disclosures and making it illegal for dealers to engage in certain conduct.

NEW JERSEY CONSUMER FRAUD VEHICLE SALE FREQUENTLY ASKED QUESTION #3

WHAT REMEDIES ARE AVAILABLE TO CONSUMER FRAUD VICTIMS?

The New Jersey Consumer Fraud Act is a powerful weapon against fraud in new and used vehicle sales and leasing because the Act provides strong remedies to consumers harmed by misconduct committed by car dealers. A violation of the New Jersey Consumer Fraud Act may allow the consumer to recover the following remedies against a dealer:

  • Treble damages for an ascertainable loss of money or property caused by the New Jersey Consumer Fraud Act violation.
  • Attorney’s fee award for prosecuting the claim.
  • Cancellation of fraudulent debts.
  • Refund of money lost due to the New Jersey Consumer Fraud Act violation.

NEW JERSEY CONSUMER FRAUD VEHICLE SALE FREQUENTLY ASKED QUESTION #4

WHO CAN BE SUED FOR CONSUMER FRAUD?

A consumer fraud claim can be brought against an individual person or his or her legal representative, a partnership, corporation, company, trust, business entity, association as well as their agent, employee, salesperson, partner, officer, director, member, stockholder, associate, trustee or beneficiary of a trust. This means that car dealers, their salespeople, their management and their owners all may be sued for consumer fraud. However, to be successful in a consumer fraud claim against an individual or business, a consumer must show that the individual or business actually committed conduct that violates the Act.

NEW JERSEY CONSUMER FRAUD VEHICLE SALE FREQUENTLY ASKED QUESTION #5

WHAT ARE THE DIFFERENT KINDS OF CONSUMER FRAUD COMMITTED BY DEALERS?

There are three possible ways for a car dealer to be liable for Consumer Fraud. The Act itself declares two general categories of conduct as unlawful. The first category of Consumer Fraud violations involve affirmative acts committed by the vehicle dealer when selling or advertising cars for sale or lease makes “any unconscionable commercial practice, deception, fraud, false pretense, false promise or misrepresentation” unlawful. These are considered affirmative acts. The second category of New Jersey Consumer Fraud Act violations involves the “knowing concealment, suppression or omission of any material fact.” These are considered conduct by omission. The third basis for responsibility under the Act involves either a specific-situation New Jersey law or administrative regulations enacted to interpret the Act itself. New Jersey law and regulations define specific conduct prohibited by law.

NEW JERSEY CONSUMER FRAUD VEHICLE SALE FREQUENTLY ASKED QUESTION #6

WHAT ARE AFFIRMATIVE ACT CONSUMER FRAUD CLAIMS AGAINST DEALERS?

Any of the following affirmative acts committed by a car dealer might support a Consumer Fraud claim:

  • “Unconscionable commercial practice” - an activity which is basically unfair or unjust which materially departs from standards of good faith, honesty in fact and fair dealing in the public marketplace. To be unconscionable, there must be factual dishonesty and a lack of fair dealing.
  • “Deception” - conduct or advertisement which is misleading to an average consumer to the extent that it is capable of, and likely to, mislead an average consumer. It does not matter that at a later time it could have been explained to a more knowledgeable and inquisitive consumer. It does not matter whether the conduct or advertisement actually have misled the customer. The fact that the business may have acted in good faith is irrelevant. It is the capacity to mislead that is important.
  • “Fraud” - a perversion of the truth, a misstatement or a falsehood communicated to another person creating the possibility that that other person will be cheated.
  • “False pretense” - an untruth knowingly expressed by a wrongdoer.
  • “False promise” - an untrue commitment or pledge, communicated to another person, to create the possibility that that other person will be misled.
  • “Misrepresentation” - an untrue statement made about a fact which is important or significant to the sale/advertisement, communicated to another person to create the possibility that other person will be misled. A “misrepresentation” is a statement made to deceive or mislead.

NEW JERSEY CONSUMER FRAUD VEHICLE SALE FREQUENTLY ASKED QUESTION #7

IS PROOF OF DECEPTION OR INTENT NECESSARY TO PROVE AN AFFIRMATIVE ACT CONSUMER FRAUD CASE?

For any of the above affirmative acts, it is not necessary for liability under the New Jersey Consumer Fraud Act that a person actually be misled or deceived by another’s conduct. It is not necessary for the customer to show that the business intended to deceive. What is important is that the affirmative act must have had the potential to mislead or deceive when it was performed. The capacity to mislead is the prime ingredient of affirmative consumer fraud claims Proof of intent is not necessary an essential element for these affirmative acts

NEW JERSEY CONSUMER FRAUD VEHICLE SALE FREQUENTLY ASKED QUESTION #8

WHAT ARE KNOWING OMISSION CONSUMER FRAUD CLAIMS AGAINST DEALERS?

A car dealer may be liable for Consumer Fraud if the car dealer:

  • knowingly concealed, hid/suppressed, kept something from being known; or
  • omitted or left out or did not mention an important or significant fact;
  • and the misconduct was done purposely or with the intent that others would rely on that concealment/suppression/omission in connection with the sale/advertisement of any merchandise.

For these acts of omission, a person acts “knowingly” if he/she is aware that his/her conduct is of a nature that it is practically certain that his/her conduct will cause a particular result. He/She acts with knowledge, consciously, intelligently, willfully or intentionally. To “conceal” is to hide, secrete, or withhold something from the knowledge of others or to hide from observation, cover or keep from sight or prevent discovery of. “Concealment” is a withholding of something which one is bound or has a duty to reveal so that the one entitled to be informed will remain in ignorance. To “suppress” is to put a stop to a thing actually existing, to prohibit or put down, or to prevent, subdue, or end by force. “Suppression” is the conscious effort to control or conceal unacceptable impulses, thought, feelings or acts. A person acts “purposely” if it is his/her conscious object to engage in conduct that of a certain nature or cause a particular result and he/she is aware of hopes or believes that the attendant circumstances exist. “Intent” is a design, resolve, or determination with which a person acts. It refers only to the state of mind existing when an act is done or omitted. It is not necessary that any person be, in fact, misled or deceived by another’s conduct. What is important is that the dealer must have meant to mislead or deceive when he/she/it/they acted. The fact that the dealer acted knowingly or with intent is an essential element of acts of omission and knowledge or intent must be shown. Where the alleged consumer fraud can be viewed as either an omission or an affirmative act, the dealer is liable for the conduct as an omission only where the dealer committed a consumer fraud by omission and intent is shown.

NEW JERSEY CONSUMER FRAUD VEHICLE SALE FREQUENTLY ASKED QUESTION #9

WHAT ARE PER SE NEW JERSEY CONSUMER FRAUD VIOLATIONS?

The third basis for responsibility under the Act involves a car dealer violating a specific-situation New Jersey law or administrative regulation enacted to interpret the Act itself. Those laws and regulations define specific conduct prohibited by law. If the car dealer fails to follow the law or regulation, they can be held responsible for consumer fraud. These types of consumer fraud violations are called per se or technical consumer fraud violations. Proof of intent on the dealer’s part when they commit the misconduct isn’t necessary.

NEW JERSEY CONSUMER FRAUD VEHICLE SALE FREQUENTLY ASKED QUESTION #10

WHAT ARE SOME KINDS OF PER SE CONSUMER FRAUD VIOLATIONS COMMITTED BY USED CAR DEALERS?

The following are some examples of potential per se consumer fraud violations committed by used car dealers:

  • The advertisement of a vehicle or other merchandise as part of a plan or scheme not to sell the item or service so advertised or not to sell the same at the advertised price.
  • To require a person in connection with a sale of a vehicle or other merchandise to require or request the consumer to sign any document as evidence or acknowledgment of the sales transaction, of the existence of the sales contract, or of the discharge by the person of any obligation to the consumer specified in or arising out of the transaction or contract, unless the dealer shall at the same time provide the consumer with a full and accurate copy of the document so presented for signature. However, this requirement doesn’t apply to orders placed through the mail by the consumer for merchandise.
  • To fail to disclose, prior to sale, the existence and terms of any written warranty, service contract or repair insurance currently in effect on a used car provided by a person other than the dealer, and subject to transfer to a consumer, if known to the dealer.
  • To misrepresent the terms of any written warranty, service contract or repair insurance currently in effect on a used car provided by a person other than the dealer, and subject to transfer to a consumer.
  • To fail to disclose, prior to sale, the existence and terms of any written warranty, service contract or repair insurance offered by the dealer in connection with the sale of a used car.
  • To misrepresent the terms of any warranty, service contract or repair insurance offered by the dealer in connection with the sale of a used car.
  • To represent, prior to sale, that a used car is sold with a warranty, service contract or repair insurance when the vehicle is sold without any warranty, service contract or repair insurance.
  • To fail to disclose, prior to sale, that a used car is sold without any warranty, service contract, or repair insurance.
  • To fail to provide a clear written explanation, prior to sale, of what is meant by the term "as is," if a used car is sold "as is".
  • As to certain vehicles meeting the minimum requirements of the New Jersey Used Car Lemon Law, to sell a used motor vehicle to a consumer without giving the consumer a New Jersey used car warranty which takes the form of a written warranty meeting specific minimum requirements.
  • The failure to disclose that the used car had been previously damaged and that substantial repair or body work has been performed on it when such prior repair or body work is known or should have been known by the advertiser; for the purposes of this subsection, "substantial repair or body work" shall mean repair or body work having a retail value of $ 1,000 or more.
  • To misrepresent the mechanical condition of a used car.
  • To fail to disclose, prior to sale, any material defect in the mechanical condition of used car which is known to the dealer.
  • To represent that a used car, or any component thereof, is free from material defects in mechanical condition at the time of sale, unless the dealer has a reasonable basis for this representation at the time it is made.
  • The advertisement of a used car as part of a plan or scheme not to sell or lease it or not to sell or lease it at the advertised price. Without limiting other means of proof, the following shall be prima facie evidence of a plan or scheme not to sell or lease a used car as advertised or not to sell or lease it at the advertised price:
    • Refusal to show, display, sell, or lease the advertised used car in accordance with the terms of the advertisement, unless the vehicle has been actually sold or leased during the period of publication; in that case, the advertiser shall retain records of that sale or lease for 180 days following the date of the transaction, and shall make them available for inspection by the Division of Consumer Affairs.
    • Accepting a deposit for an advertised used car, then switching the purchaser to a higher-priced used car, except when the purchaser has initiated the switch as evidenced by a writing to that effect signed by the purchaser.
    • The failure to make delivery of an advertised used car, then switching the purchaser to a higher-priced used car; except when the purchaser has initiated the switch as evidenced by a writing to that effect signed by the purchaser.
  • Accepting, charging, or obtaining from a consumer monies, or any other thing of value, in exchange for the performance of any pre-delivery service for which the automotive dealer receives payment, credit, or other value from any person or entity other than a retail purchaser of the used car.
  • Accepting, charging, or obtaining from a consumer monies, or any other thing of value, in exchange for the performance of any pre-delivery service without first itemizing the actual pre-delivery service which is being performed and setting forth in writing on the sales document the price for each specific pre-delivery service.

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Call Perlman DePetris Consumer Law for a no obligation phone consultation. Handling your case wrong from the beginning may only cost you more money and time in the end!! Try to do it right the first time by seeking legal advice from a competent lawyer! You might be entitled to be represented on a contingent basis, meaning that the attorney won’t get paid unless the case is successful and that the lawyer gets paid from your recovery instead of requiring you to pay attorney’s fees out of your own pocket up front. Other cases can be handled for a relatively small one-time payment of an up-front fixed attorney’s fee and with a contingent fee at the end of the case. Filing a claim yourself is very risky, since businesses often hire experienced defense attorneys to fight your case. Also, if you try to negotiate a settlement yourself, you may get less money than you deserve. You should always speak with an attorney before coming to any conclusions about your claim. Do not try to interpret the law by reading a website! Even if the facts of your case don’t fit Consumer Law requirements, you may be entitled to sue a business for a breach of your warranties under other state and federal laws or for a breach of contract or for some other type of claim and you may recover money damages, attorney’s fees and court costs.

DISCLAIMER

While this page gives some general background information, there is the danger that relying on this information alone could lead you to lose your claim. Laws and regulations frequently change and the law may have changed since the posting of this webpage. Factual differences between your case and cases described on this webpage can affect your chance of success. Don’t attempt to rely on the internet as the only source of information for your claim! Instead, get competent legal advice from a New Jersey licensed attorney. Call Perlman DePetris Consumer Law for a no obligation phone consultation.