What is Consumer Fraud?
Generally speaking, business activity that is unfair or unconscionable is considered “consumer fraud.” In fact, businesses in virtually any industry – both product and service – can violate New Jersey’s consumers protection laws which are of the strictest in the nation. The purpose of these laws are to protect consumers from unfair or deceptive practices.
Consumer fraud can occur in a variety of contexts, but generally involves a business practice that is fraudulent or misleading in nature. Individuals who are the victims of consumer fraud can often obtain significant compensation for their losses as the statute authorizes treble damages (3 times the actual damage) plus their attorney’s fees (N.J.S.A. 56:8-19).
The most common question I receive is “How do I know if something is consumer fraud?” The simplest answer is that if you feel “screwed” by a business or company, you probably have been the victim of consumer fraud. If this is ever the case, we advise you to contact us for legal advice and possible representation. Remember, the statute in New Jersey requires that the company, not you, pay for attorney’s fees and once they are paying , you might as well hire the best – it comes out of their pocket.
False or Deceptive Advertising
False or deceptive advertising is one of the most common reasons that consumer fraud complaints are filed. While businesses are legally entitled to advertise their product in a positive light and engage in a certain degree of “puffery,” such advertising has the potential to cross over into consumer fraud if it makes false or misleading statements to consumers. As an example, a company may be allowed to claim that their product is the “best,” but it cannot state facts that are ultimately not true, such as that their product is more effective, safe or recommended than its competitors if such is not true.
Unfair Pricing
Consumer fraud can also arise in the way that businesses price their goods or services. A common example of the way in which unfair pricing schemes occur is selling a product for a different price than advertised, or adding concealed fees on top of the price advertised. In fact, it is very common for businesses to conceal costs associated with a purchase, such as shipping or processing costs, and such is often consumer fraud.
The Sale of Unsafe Products
Another common context in which consumer fraud allegations may arise is in the sale of defective products. If the company selling the products was aware that the products being sold were somehow defective, it may give rise to a consumer fraud claim.
Internet Fraud
The explosive growth of Internet-based commerce in recent years has given fraudsters new opportunities to victimize consumers in many different ways. Some of these Internet fraud schemes are simply updated versions of scams that have been around for decades, while others are newer forms of fraud that rely on new technology in order to effectuate. A common example of an Internet fraud is the now-infamous “Nigerian Prince” scam in which an email indicates to the victim that assets that are being held in a foreign bank account can only be released through an a payment or with information regarding the consumer’s bank account. Of course, there are no real assets and the scheme is simply an attempt to trick the victim into providing money or information that can allow the fraudster to access the victim’s bank account.
Unfair terms and conditions
Sometimes, businesses may include unfair or terms and conditions into otherwise standard agreements. Often this kind of fraud involves the use of personal information in a way to which the consumer would not have agreed had he or she been aware of the conditions.