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Legal Memorandum: Consumer Fraud Act in NJ

Issue: WHETHER THE NEW JERSEY CONSUMER FRAUD ACT MUST BE LIBERALLY CONSTRUED TO THE CONSUMER’S BENEFIT.

Area of Law: Business Organizations & Contracts, Litigation & Procedure, UCC & Secured Transactions
Keywords: Consumer Fraud Act purpose; Consumer's benefit; Remedial statute
Jurisdiction: New Jersey
Cited Cases: 206 N.J. Super. 11; 340 N.J. Super. 462; 440 A.2d 810; 129 Mich. App. 178; 100 N.J. 57; 138 N.J. 2; 167 N.J. Super. 417; 284 N.J. Super. 67; 162 N.J. 134; 341 N.W.2d 268; 124 N.J. 520; 369 N.J. Super. 402; 288 N.J. Super. 372; 110 N.J. 464
Cited Statutes: N.J. Stat. § 56:8-19
Date: 02/01/2005

  The New Jersey Consumer Fraud Act (“Act” or “CFA”) was amended in 1971 with the aim of making it “one of the strongest consumer protection laws in the nation.”  Governor’s Press Release for Assembly Bill No. 2402, at 1 (Apr. 19, 1971).  The Act was designed to protect consumers “by eliminating sharp practices and dealings in the marketing of merchandise and real estate.”  Channel Cos., Inc. v. Britton, 167 N.J. Super. 417, 418 (App. Div. 1979).  The Legislature’s concern was “the victimized consumer, not the occasionally victimized seller.”  Id.  The history of the Act is marked by a constant expansion for consumer protection, see Lettenmaier v. Lube Connection, Inc., 162 N.J. 134, 139 (1999), which expansion will be stopped and reversed, contrary to legislative intent, if the damages are not full and complete. 


The Act is a remedial statute intended to protect the consumer against loss resulting from fraud by persons selling goods and services.  Leon v. Rite Aid Corp., 340 N.J. Super. 462, 468 (App. Div. 2001).  The remedial goal of the Act is to make the consumer whole by considering all applicable damages theories.  See D’Ercole Sales, Inc. v. Fruehauf Corp., 206 N.J. Super. 11 (App. Div. 1985).

However, the Act is also intended to deter fraudulent practices and unconscionable commercial practices.  See Leon, 340 N.J. Super. at 468.  In order to achieve this […]

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