Archive for the ‘Consumer Fraud Act’ Category

New Jersey’s Consumer Fraud Act – What’s a Consumer?

Picture this: a company, Onyx Acceptance, makes a “guaranteed reservation” at Trump Taj Mahal Casino Resort in Atlantic City (“Trump”) for a banquet hall and 60 guest rooms, and prepaid $29,754.05. Unfortunately, Trump over-books and cannot honor the full reservation, and instead, after several hours of arguing, attempts to remedy the situation by booking rooms at area hotels and providing free transportation back and forth. As a result, Onyx deems the event a failure, and the matter heads to court.

New Jersey’s Consumer Fraud Act was intended to protect the public against unscrupulous contractors and others. A claim for relief under the Act requires a showing of:

• “unlawful conduct” by the defendant;

• “an ascertainable loss” by the plaintiff; and

• a causal connection between the defendant’s unlawful conduct and the plaintiff’s ascertainable loss.

At trial, the court concluded that Trump falsely represented the guaranteed nature of Onyx’s rooms, which constituted an “unconscionable business practice” violative of the Consumer Fraud Act. For purposes of the Consumer Fraud Act, it did not matter if Trump acted in good faith. “When Trump represented that the rooms were guaranteed, Trump did not really mean that the rooms would be guaranteed, at least not in the way any reasonable consumer would understand, because Trump defined the term guaranteed in a way that no reasonable consumer could predict.”

The end result? After an appeal, Onyx was awarded $212,159.74, consisting of $89,262.15 in treble damages (three times the underlying damage award of $29,754.05), plus $90,000 in counsel fees, and costs of $32,897.59.

The house does not always win, and the Consumer Fraud Act is not limited to individuals.