Q What is the NJ Consumer Fraud Act?
The Consumer Fraud Act, N.J.S.A. 56:8-2, prohibits:
“The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of merchandise… “
A consumer who can prove (1) an unlawful practice, (2) an ascertainable loss, and (3) a causal relationship between the unlawful conduct and the ascertainable loss, is entitled to legal and/or equitable relief, treble damages, and reasonable attorneys' fees, N.J.S.A. § 56:8-19. The broad language of the provisions of New Jersey's Consumer Fraud Act (CFA), N.J.S.A. §§ 56:8-1 to 56:8-195, encompasses the offering, sale, or provision of consumer credit. New Jersey's Consumer Fraud Act, N.J.S.A. §§ 56:8-1 to 56:8-195, prohibits fraud in connection with the subsequent performance of a loan. Lending institutions and their servicing agents are not immune from New Jersey's Consumer Fraud Act, N.J.S.A. §§ 56:8-1 to 56:8-195; they cannot prey on the unsophisticated, those with no bargaining power, those bowed down by a foreclosure judgment and desperate to keep their homes under seemingly any circumstances. A plaintiff asserting a claim under New Jersey's Consumer Fraud Act (CFA), N.J.S.A. §§ 56:8-1 to 56:8-195, must prove that the defendants acted contrary to the permissible standard of conduct under the CFA. The standard of conduct that the term "unconscionable" implies is lack of good faith, honesty in fact and observance of fair dealing. With respect to the applicability of New Jersey's Consumer Fraud Act (CFA), N.J.S.A. §§ 56:8-1 to 56:8-195, to a post-foreclosure-judgment agreement involving a stand-alone extension of credit, in fashioning and collecting on such a loan--as with any other loan--a lender or its servicing agent cannot use unconscionable practices in violation of the CFA.