New Jersey has one of the strongest consumer protection laws in the nation. In response to widespread complaints about selling practices that victimized consumers, the New Jersey Legislature passed the Consumer Fraud Act (the “Act”) to prevent deception, fraud, or falsity in connection with the sale and advertisement of merchandise and real estate. The Act is aimed at promoting truth and fair dealing in the market place by promoting the disclosure of relevant information to enable the consumer to make intelligent decisions in the selection of products and services. In addition to giving the Attorney General broad powers to prosecute, the Act also provides consumers with a private cause of action. A private consumer may recover damages under the Act when he or she establishes that a merchant committed unlawful resulting in an ascertainable loss to the consumer.
The first requirement to be established in a consumer’s private cause of action is that a merchant committed an unlawful practice. Unlawful practices fall into three general categories: affirmative acts, knowing omissions, and regulatory violations. An affirmative act is something done voluntarily by a merchant. It includes not merely physical acts, but also any steps taken voluntarily by a merchant to advance a plan or design, or to accomplish a purpose. Affirmative acts include unconscionable commercial practices, deception, fraud, false pretenses, false promises, or misrepresentations. These acts are defined as follows :
A misrepresentation is an untrue statement made about a fact that one which is material to the transaction and is made to create the possibility that the consumer will be misled. A statement is material if 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, although a reasonable man would not so regard it. A merchant who makes an affirmative misrepresentation is liable even in the absence of knowledge of the falsity of the misrepresentation, negligence, or the intent to deceive.

Deceptive acts consist of conduct or advertisement that 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, nor need the conduct/advertisement actually have misled the plaintiffs. The fact that the defendants may have acted in good faith is also unimportant. It is the capacity to mislead that is important. Misleading advertising qualifies as a deceptive commercial practice.

Fraud is a perversion of the truth, a misstatement or a falsehood communicated to another person creating the possibility that that other person will be cheated. Again, it is not necessary that the plaintiffs show either defendants’ knowledge or intent or that the misrepresentation was of a material fact.

A false pretense is an untruth knowingly expressed by a wrongdoer.

A false promise is an untrue commitment or pledge communicated to another person to create the possibility that that other person will be misled.

An unconscionable commercial practice is a lack of good faith, honesty in fact and observance of fair dealing.

Proof that a merchant committed any one of these acts alone will establish an unlawful practice under the Act. It is not necessary to show that the merchant intended to commit an unlawful practice.
The next unlawful practices are knowing omissions and include concealment, suppression or omission. An omission is the act of neglecting to perform what the law requires. Concealment and suppression involve the withholding or hiding of information from the consumer that the merchant has a duty to reveal so that the consumer will remain in ignorance. Like the affirmative acts, the knowing omissions are set forth in the disjunctive and, therefore, any one of them constitutes a violation. However, knowledge and intent are required elements with respect to these violations. Therefore, it must be shown that the merchant knowingly omitted a fact with the intent that the consumer would rely upon such concealment, suppression, or omission.
The third category of unlawful acts consists of violations of regulations established by the Attorney General under the Act. The Division of Consumer Affairs has promulgated regulations that apply to specific industries, such as the delivery of household furniture and home improvement contractors. These regulations provide a standard of conduct that must be followed by the merchants in the specified industry. In addition to the regulatory requirements, there are also specific acts that are prohibited by different sections of the Act. The merchants subject to the regulatory and statutory requirements are assumed to be familiar with them and, therefore, any violation, regardless of intent or moral culpability, constitutes an unlawful practice.
Proof that a merchant committed an unlawful practice alone does not mean that a consumer has a private cause of action against the merchant. In order to succeed, the consumer also has to show that he or she suffered an ascertainable loss. An ascertainable loss includes out-of-pocket expenses, costs to make repairs, replacement value of the goods, or a loss in value. An ascertainable loss also occurs when the plaintiff received less than what he or she was promised. A consumer is not required to spend the money before becoming entitled to bring a claim. An estimate of damages calculated within a reasonable degree of certainty will suffice to demonstrate an ascertainable loss. A private victim is also entitled to a full refund of all monies spent as a result of a merchant’s consumer fraud.
The final element in a private cause of action is causation. This requires the consumer to prove that the ascertainable loss was caused by the unlawful act. When a consumer proves that a merchant committed an unlawful practice causing the consumer to suffer an ascertainable loss, he or she is entitled to an award of treble damages (the ascertainable loss tripled) and attorneys’ fees.