Potential Changes to the Consumer Fraud Act: Triple Damages and Attorney Fees, Does the CFA need them?
Lobbying groups have been trying to change the consumer fraud act for years. Lobbying groups and support campaigns of legislatures, assemblymen and senators who support changes to the Consumer Fraud Act that damage consumers. There are several areas which lobbying groups attack, complain about and publicize
Triple or treble damages:
Lobbying organizations try to convince the public and New Jersey politicians that triple damages or triple damages are bad. The lobbyists assert that triple damages are unnecessary and unwarranted and should only be awarded where there is an intentional violation of the law. They also argued that triple damages should be subject to the discretion of the judge.
Right now, the Consumer Fraud Act is clear. For any violation of the Consumer Fraud Act where there is an ascertainable loss triple damages are mandatory and not discretionary. The policy behind this section of the Consumer Product Act is straightforward. The purpose is to deter all violations of the Consumer Fraud Act. If the business is no that when and if they engaged in a deceptive business practice, they will be held liable for triple damages they will take the responsibility, time, and effort to make sure they did do not violate the New Jersey Consumer Fraud Act. While it is understandable businesses make it upset that there are triple damages for unintentional violations of the Consumer Fraud Act, the law charges the businesses with the responsibility to assure compliance with appropriate regulations and compliance with general good business practices.
The law presumes that if the businesses take the added effort to assure compliance there will be no issues. There also is an underlying assumption that a consumer has sustained an ascertainable loss. The law also allocates the risk from the consumer to the business. In short, the Legislature has determined that if there is an ascertainable or measurable loss with a prohibited business practice this more efficient to allocate this risk to the business rather than the innocent consumer. There is a general benefit to the public in allocating this risk and cost across numerous businesses. And yes, many claim and this will increase the cost of doing business, however the cost to consumers of goods and services is decreased if the cost of a fraud is taken out of the cost of products and services. Ultimately, the triple damages decrease the cost of goods and services rather than increase. The Consumer Fraud Act by implementing triple damages, in my opinion, reduces the cost of goods and services to consumers.
The compliance is minimal. Businesses in a specific industry are charged with knowledge of the regulations. This is not a significant requirement. Of businesses are better charged with allocating the cost than an innocent consumer. This is a policy consideration which is served New Jersey well.
Attorney Fees:
Lobbying groups have attempted to extinguish mandatory award of attorney's fees for anything except intentional violations. The suit be a significant mistake which would significantly impact the effect of the New Jersey Consumer Fraud Act.
The concept of awarding attorney's fees for all violations of the Consumer Fraud Act is a simple, to encourage attorneys to litigate in cases where damages are small or insignificant. In litigating cases where damages are small or insignificant, social justice/social engineering assures that there is compliance with the laws which reduces prices for consumers for both goods and services.
If the attorney's fees provision were removed all but for intentional violations it would be difficult if not impossible to obtain an attorney at the beginning of the case to litigate a claim against a business or damages are smaller minimal. As it is, there are a limited number of attorneys that has significant experience in handling Consumer Fraud Act cases because of the pre-existing restrictions and issues awarding fees, costs and obtaining jury trials to get triple damages.
The very purpose of the Consumer Fraud Act as stated by the New Jersey Supreme Court is to encourage competent counsel to litigate cases with the damages might be deemed minimal or insignificant. The purpose of the act is to assure compliance with the act in good business practices
CAR DEALERSHIP GET NEW PROTECTION IF BILL PASSES
This bill protects car dealership from lawsuits.
Why are car dealerships being protected by the politicians.
There has been very powerful anti-consumer legislation introduced into the Assembly that would destroy the effect of the Consumer Fraud Act. These "amendments" to the act would probably destroy all of the consumer protection in the current consumer fraud laws.
There are far-reaching effects of this bill for New Jersey residents. The most likely effect is that it will cost consumers a lot of money. This will result in a redistribution of wealth and encourage corrupt businesses to come to New Jersey, protect car dealerships from consumer fraud lawsuits, and force honest businesses to change their businesses practices.
It will also eviscerate the ability of the Attorney General to intercede and stop deceptive conduct by filing suit and stopping unfair and deceptive practices.
The bill is sponsored by the following respected assembly persons, who only have the public's best interest at heart and have to tackle many divergent interests and issues and do the best they can. There are some legitimate concerns regarding the act and the implementation of the Consumer Fraud Act, as the courts have been doing a very good job in defining the Consumer Fraud Act and applying it on a daily basis.
Corresponding legislation has now been introduced into the state senate and needs to be opposed. This legislation is anti-consumer in every fashion.
Assemblyman Craig Caughlin, District 19 Democrat
The Law Office of Jonathan Rudnick LLC Consumer Blog.