NJ bill would reduce penalties for violating Consumer Fraud Act

New Jersey’s Assembly Consumer Affairs Committee recently approved a bill meant to reduce penalties for companies that are found by a court to have committed only a technical violation of the state Consumer Fraud Act. Currently, an individual who wins a consumer fraud lawsuit against a New Jersey company is entitled to compensation for the costs of litigation, including attorney fees, even if no damages were suffered by the plaintiff.

The bill, which was approved by the committee in a 4-0 vote, would eliminate, under defined circumstances, the losing company’s automatic obligation to cover attorney fees and other costs. A company found in violation of the Consumer Fraud Act would be able to avoid paying those costs if the company “made a good faith effort to comply,” and if the technical violation in question did not affect product quality or otherwise result in consumer loss.

In support of the bill, Assemblyman Reed Gusciora said, “The legislation provides relief for first time violations where every intention was made to follow the rules of the Consumer Fraud Act and this effort is recognized by the court.”

The bill would not affect consumer fraud lawsuits filed by the state attorney general. The state would still be able to collect for various costs, including attorney fees, even if only a technical violation has occurred.

Readers in New Jersey may want to follow up to see if the legislation passes.

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Source: NorthJersey.com, “NJ committee votes to remove consumer laws’ fee requirement,” Hugh R. Morley, Oct. 23, 2014