NEW JERSEY USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTIONS

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INTRODUCTION

This page discusses New Jersey used car advertising fraud frequently asked questions.

NEW JERSEY USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTION #1

WHAT IS NEW JERSEY USED CAR ADVERTISING FRAUD?

A significant amount of consumer fraud is committed in the used car sales industry. The average used car buyer is exposed to simply too much incorrect information about used cars. The purchase of a car is a major investment for many New Jersey customers. Used car buyers need protection from misleading information. To attempt to combat this consumer fraud and to promote the purposes of the New Jersey Consumer Fraud Act, the Division of Consumer Affairs adopted regulations regarding automotive advertising. A New Jersey used car dealer’s failure to follow the New Jersey Automotive Advertising Regulations may result in a violation of the New Jersey Consumer Fraud Act. These regulations:

  • Identify prohibited automotive advertising practices under the New Jersey Consumer Fraud Act.
  • Require mandatory disclosure in advertisements of certain information about advertised used cars.
  • Require on-site disclosures about advertised used cars.

NEW JERSEY USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTION #2

WHAT ARE THE NEW JERSEY CAR ADVERTISING REGULATIONS?

The New Jersey Car Advertising Regulations, also called the New Jersey Automobile Advertising Regulations, regulate the advertisement of certain used cars for sale in New Jersey. The regulations require New Jersey used car dealers to make certain disclosures when advertising cars for sale.

NEW JERSEY USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTION #3

WHAT USED CARS ARE COVERED BY THE NEW JERSEY CAR ADVERTISING REGULATIONS?

The New Jersey Automobile Advertising Regulations apply to the following used cars:

  • vehicles driven otherwise than by muscular power, except vehicles running only upon rails or tracks.
  • offered for sale or lease and specifically identified by an advertised price.
  • "used car" means any used car with an odometer reading of greater than 1,000 miles, except for a "demo".
  • "demo" means a used car used exclusively by a car dealer or dealer's employee that has never been titled and to which the new vehicle warranty still applies.

NEW JERSEY USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTION #4

WHICH ADVERTISERS MUST FOLLOW THE NEW JERSEY CAR ADVERTISING REGULATIONS?

The following people selling used cars in New Jersey for a living must comply with the New Jersey Automobile Advertising Regulations:

  • Any natural person or his legal representative, partnership, corporation, company, trust, business entity or association and any agent, employee, salesman, partner, officer, director, member, stockholder, associate, trustee or cestuis que trustent thereof;
  • who, in the ordinary course of business, is engaged in the sale, leasing or financing of used cars at retail; or
  • who in the course of any 12 month period offers more than three used cars for sale or lease; or
  • who is engaged in the brokerage of used cars whether for sale or lease and who causes an advertisement to be made for the retail sale or lease of used cars. "Broker" means a person who in the course of any 12 month period arranges or offers to arrange the retail sale or lease of more than three used cars from the inventory of other business entities.

Under the New Jersey Car Advertising regulations, a "Dealer" means any person who, in the ordinary course of business, is engaged in the sale or leasing of used cars at retail or who in the course of any 12-month period offers more than three used cars for sale or lease at retail.
An advertising agency and the owner or publisher of a newspaper, magazine, periodical, circular, billboard or radio or television station acting on behalf of an advertiser shall be deemed an advertiser within the meaning of the regulations, when the agency or owner's or publisher's staff prepares and places an advertisement for publication. The agency, owner, or publisher shall not be liable for a violation of the New Jersey Automobile Advertising Regulations when reasonably relying upon data, information or material supplied by the person for whom the advertisement is prepared or placed or when the violation is caused by an act, error or omission beyond the preparer's control, including but not limited to, the post-publication performance of the person on whose behalf such advertisement was placed.

NEW JERSEY USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTION #5

WHAT ADVERTISEMENTS ARE COVERED BY THE NEW JERSEY CAR ADVERTISING REGULATIONS?

For the regulations to apply, the advertisement must likely:

  • Offer a car for sale or lease at retail in any of the following:
    • Newspaper.
    • Periodical.
    • Pamphlet.
    • Circular
    • Other publication.
    • Paper.
    • Sign.
    • Radio or television broadcast.
  • Be uttered, issued, printed, disseminated, published, circulated or distributed within New Jersey concerning used cars offered for sale or lease at locations exclusively within New Jersey; or
  • Be uttered, issued, printed, disseminated, published, circulated or distributed to any substantial extent within New Jersey concerning used cars offered for sale or lease at locations within New Jersey and outside New Jersey, or at locations exclusively outside New Jersey.

The New Jersey Automobile Advertising Regulations apply to any of the following types of conduct involving any used car involving advertisements that are covered by the regulations:

  • the attempt directly or indirectly by publication, dissemination, solicitation, indorsement or circulation or in any other way;
  • to induce directly or indirectly
  • any person to enter or not enter into any obligation or acquire any title or interest in any merchandise or to increase the consumption thereof or to make any loan.

Under the New Jersey Car Advertising Regulations, the term "Advertised price" means the dollar amount required to purchase or lease a New Jersey used car, advertised as:

  • The total price; or
  • The monthly payment price; or
  • The deferred payment price; or
  • A specific discount or savings on the manufacturer's suggested retail price.

An example of a violation of the advertising regulations could be a used car dealer's advertisement of used cars "priced well below dealer invoice".

NEW JERSEY USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTION #6

WHAT TYPE OF DISCLOSURES MUST A NEW JERSEY USED CAR DEALER MAKE AT ITS DEALERSHIP?

The following information about an advertised used car must be provided at the main entrance(s) to the business premises where the used car is displayed or in proximity to the vehicle or on the vehicle itself:

  • A copy of any printed advertisement that quotes a price for the sale or lease of that vehicle; alternatively, a tag may be attached to the used car(s) stating the advertised price as well as the other information required mandatory disclosure requirements in all advertisements for the sale or lease of used cars.
  • A fuel economy label, if required by the Federal law known as the Used car Information and Cost Savings Act, 15 U.S.C. § 2006; and
  • The Used Car Buyers Guide, if required by the Federal Trade Commission's Used Car Rule, 16 C.F.R. Part 455.2.

A New Jersey used car dealer’s failure to provide this information results in a violation of the New Jersey Consumer Fraud Act.

NEW JERSEY USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTION #7

WHEN MUST A CAR DEALER HAVE A VEHICLE ADVERTISED AVALIABLE FOR SALE OR LEASE AT ITS DEALERSHIP?

A used car dealer advertising a car for sale shall have that used car advertised for sale on premises and available for sale at the advertised price during the period of publication or a record of the sale of that vehicle at the advertised price or less during that period.

An advertiser shall have a New Jersey used car advertised for lease available for lease at the advertised price during the period of publication, or a record of the lease of that vehicle at the advertised price or less during that period. Such record shall consist of all applicable advertisements and a copy of the executed contract with the purchaser or lessee of the vehicle; this documentation shall be maintained for 180 days after the transaction and shall be made available for inspection by the New Jersey Division of Consumer Affairs.

If the used car is sold or leased during the period of publication, the advertiser must so notify consumers who inquire by telephone or in person. A New Jersey used car dealer’s failure to follow these requirements results in a violation of the New Jersey Consumer Fraud Act.

NEW JERSEY USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTION #8

WHAT INFORMATION MUST A NEW JERSEY USED CAR SALE ADVERTISEMENT INCLUDE?

In any advertisement offering for sale a used car at an advertised price, the following information must be included:

  • The advertiser's business name and business address;
  • A statement that "price(s) include(s) all costs to be paid by a consumer, except for licensing costs, registration fees, and taxes". If the statement appears as a footnote, it must be set forth in at least 10 point type. Under the New Jersey Automotive Advertising regulations, "all costs to be paid by a consumer" means manufacturer-installed options, freight, transportation, shipping, dealer preparation, and any other costs to be borne by a consumer except licensing costs, registration fees, and taxes;
  • The year, make, model, and number of engine cylinders of the advertised used car;
  • Whether the transmission is automatic or manual; whether the brakes and steering mechanism are power or manual; and whether the vehicle has air conditioning, unless those items are standard equipment on the advertised used car. This provision shall not apply to advertisements for motorcycles;
  • The last eight digits of the vehicle identification number, preceded by the letters "VIN". This provision shall not apply to radio and television broadcasts, or to advertisements for motorcycles; and
  • A list of any dealer installed options on the advertised used car and the retail price of each, as determined by the dealer.
  • The actual odometer reading as of the date the advertisement is placed for publication; and
  • The nature of prior use unless previously and exclusively owned or leased by individuals for their personal use, when such prior use is known or should have been known by the advertiser.

A New Jersey used car dealer’s failure to provide this information results in a violation of the New Jersey Consumer Fraud Act.

NEW JERSEY USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTION #9

WHAT INFORMATION MUST A DEMONSTATOR CAR SALE ADVERTISEMENT INCLUDE?

In any advertisement offering a "demo" for sale, the following information must be provided:

  • The advertiser's business name and business address;
  • A statement that "price(s) include(s) all costs to be paid by a consumer, except for licensing costs, registration fees, and taxes". If the statement appears as a footnote, it must be set forth in at least 10 point type. Under the New Jersey Consumer Fraud Act automotive regulations, "all costs to be paid by a consumer" means manufacturer-installed options, freight, transportation, shipping, dealer preparation, and any other costs to be borne by a consumer except licensing costs, registration fees, and taxes;
  • The manufacturer's suggested retail price as it appears on the Monroney label, clearly denominated by using the abbreviation "MSRP";
  • The year, make, model, and number of engine cylinders of the advertised used car;
    Whether the transmission is automatic or manual; whether the brakes and steering mechanism are power or manual; and whether the vehicle has air conditioning, unless those items are standard equipment on the advertised used car. This provision shall not apply to advertisements for motorcycles;
  • The last eight digits of the vehicle identification number, preceded by the letters "VIN". This provision shall not apply to radio and television broadcasts, or to advertisements for motorcycles; and
  • A list of any dealer installed options on the advertised used car and the retail price of each, as determined by the dealer.
  • Identification as a "demo"; and
  • The actual odometer reading as of the date the advertisement is placed for publication.

A New Jersey used car dealer’s failure to provide this information results in a violation of the New Jersey Consumer Fraud Act.

NEW JERSEY USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTION #10

WHAT CONDUCT IS PROHIBITED IN THE ADVERTISEMENT OF USED CARS FOR SALE?

In any type of used car advertising, the following practices by a New Jersey used car dealer results in a violation of the New Jersey Consumer Fraud Act:

  • The use of any type size, location, lighting, illustration, graphic depiction or color so as to obscure or make misleading any material fact;
  • The setting forth of an advertised price which has been calculated by deducting a down payment, trade-in allowance or any deductions other than a manufacturer's rebate and dealer's discount;
  • The setting forth of an advertised price which fails to disclose, adjacent to the advertised price, that it has been calculated by deducting a manufacturer's rebate or dealer's discount;
  • The failure to state all disclaimers, qualifiers, or limitations that in fact limit, condition, or negate a purported unconditional offer (such as a low APR or high trade-in amount), clearly and conspicuously, next to the offer and not in a footnote identified by an asterisk. Such disclosure shall be made verbally in a radio or television advertisement. Identical information pertaining to all used cars in a group of advertised used cars, however, may appear in a footnote, provided the type is no smaller than 10 point;
  • The failure to state the applicable time period of any special offer, in at least 10-point type immediately adjacent to the special offer, unless the special offer is a manufacturer's program;
  • The use of the word "free" when describing equipment or other item(s) to be given to the purchaser or lessee of a New Jersey used car, if the "free" item has a value which has increased the advertised price. In using the word "free" in advertising, the advertiser shall comply with the Federal Trade Commission Rule, 16 CFR § 251, and any amendments thereto;
  • 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;
  • The use of the terms "Public Notice", "Public Sale", "Liquidation", "Liquidation Sale", or terms of similar import, where such sale is not required by court order or by operation of law or by impending cessation of the advertiser's business;
  • The use of terms such as "Authorized Sale", "Authorized Distribution Center", "Factory Outlet", "Factory Authorized Sale", or other term(s) which imply that the advertiser has an exclusive or unique relationship with the manufacturer;
  • The use, directly or indirectly, of a comparison to the dealer's cost, inventory price, factory invoice, floor plan balance, tissue, or terms of similar import; or the claim that the advertised price is "wholesale" or "at no profit";
    The use of the terms "guaranteed discount", "guaranteed lowest prices" or other term of similar import unless the advertiser clearly and conspicuously discloses the manner in which the guarantee will be performed and any conditions or limitations controlling such performance; this information shall be disclosed adjacent to the claim and not in a footnote;
  • The use of The statement "We will beat your best deal", or similar term or phrase if a consumer must produce a contract that the consumer has signed with another dealer or lessor in order to receive the "better" deal;
    The use of such terms or phrases as "lowest prices", "lower prices than anyone else" or "our lowest prices of the year", or similar terms or phrases if such claim cannot be substantiated by the advertiser.

If a New Jersey used car dealer commits any of these practices, the misconduct results in a violation of the New Jersey Consumer Fraud Act.

NEW JERSEY USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTION #11

WHAT TYPE OF INFORMATION MUST BE DISCLOSED IN USED CAR ADVERTISEMENTS INVOLVING CREDIT AND INSTALLMENT SALES?

The following information must be stated in any used car credit and installment sale advertising and appear adjacent to the description of the advertised used car and not in a footnote or headline, unless the information is the same for all used cars advertised. If in a footnote, it must be in at least 10-point type.

  • The total cost of the installment sale, which shall include the down payment or trade-in or rebate, if any, plus the total of the scheduled periodic payments;
  • The annual percentage rate;
  • The monthly payment figure and the number of required payments; and
  • The amount of any down payment or trade-in required or a statement that none is required.

A New Jersey used car dealer’s failure to provide this information results in a violation of the New Jersey Consumer Fraud Act

NEW JERSEY USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTION #12

WHAT CONDUCT IS PROHIBITED IN THE ADVERTISEMENT OF USED CARS INVOLVING CREDIT AND INSTALLMENT SALES?

The following used car advertising practices concerning credit and installment sale advertisements are unlawful:

  • The advertising of credit, including but not limited to such terms as "easy credit" or "one-day credit", other than that actually provided by the advertiser on a regular basis in the ordinary course of business;
  • The use or statement of an installment payment on any basis other than a monthly basis.

If a New Jersey used car dealer commits any of these practices, the misconduct results in a violation of the New Jersey Consumer Fraud Act.

NEW JERSEY USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTION #13

WHAT IS BAIT AND SWITCH USED CAR ADVERTISING?

The following used car advertising practices are unlawful "bait and switch" advertising under the New Jersey Automotive Advertising Regulations:

  • 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.

NEW JERSEY USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTION #14

WHAT TYPE OF REMEDIES ARE AVAILABLE TO NEW JERSEY USED CAR ADVERTISING FRAUD VICTIMS?

Any violation of the New Jersey Automotive Advertising Regulations is also a violation of the New Jersey Consumer Fraud Act, which may allow the consumer to recover the following remedies against the 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 USED CAR ADVERTISING FRAUD FREQUENTLY ASKED QUESTION #15

WHAT IF THE ADVERTISING MISCONDUCT COMMITTED BY THE NEW JERSEY USED CAR DEALER ISN’T COVERED BY THE REGULATIONS?

New Jersey automotive advertising fraud can take many forms. The New Jersey Automotive Advertising Regulations do not intend to point out each and every situation that might result in a court finding that a used car dealer committed fraud. For example, any of the following affirmative acts committed by a New Jersey used car dealer could support a New Jersey Consumer Fraud claim or breach of contract claim or breach of warranty claim against the shop:

  • “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.

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

A business may also be found liable for violating the New Jersey Consumer Fraud Act if the business knowingly concealed, hid/suppressed, kept something from being known/omitted, or left out or did not mention an important or significant fact 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 business must have meant to mislead or deceive when he/she/it/they acted. The fact that the business 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 business is liable for the conduct as an omission only where defendant committed a consumer fraud by omission and intent is shown.

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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 do not fit the requirements of a Lemon Law, you may be entitled to sue the manufacturer or its selling dealer for a breach of your warranties under other state and federal laws.  If the manufacturer or selling dealer breached the warranties that came with your vehicle, you may be able to 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.