Thanks to Mark D. Miller, Esq. for providing this timely information to StopCollector readers. Mark has more than 20 years of litigation experience and is well-schooled on all aspects of NJ consumer fraud. He is a partner in the BeinhakerMiller Law Firm, LLC, located in Westfield, NJ.

The New Jersey Consumer Fraud Act, NJSA 56:8-1et seq., has its roots in very noble beginnings. It was designed to protect the unknowing and unwary consumers of goods and services from unscrupulous contractors, mechanics, and retailers who employ a “bait and switch” mentality, providing unrealistic estimates only to hook the customers later with hidden charges or change orders.

New Jersey has perhaps the broadest based consumer fraud law in the country. This law, which was originally designed to protect unwary and uneducated consumers from unscrupulous contractors, has become a bane for the hardworking, legitimate, honest, and well-meaning but unwary contractor. This is especially true in the areas of home renovation, landscaping, and other home improvements. In an effort to protect consumers from this notorious area of abuse, even a technical violation of the law (for example, failure to have a written contract, failure to have a start date and a completion date on that contract, failure to specify exactly what materials are being used, or failure to have all change orders in writing signed by both parties) are all violations that could give rise to the mandatory award of attorneys’ fees, provided that the damages the consumer claims has a causal connection with the violation. To set oneself up for the award of attorneys’ fees, a consumer merely has to survive a summary judgment motion and demonstrate that a causal connection between the alleged violation and the damages claimed is at least an issue of fact to be decided by the judge. Because consumer fraud violations, in addition to administrative technicalities, can be affirmative misrepresentations or alleged omissions of fact that have the potential to mislead, few judges have the courage to make this determination prior to hearing all the facts and determining the credibility of the parties. Once having cleared that hurdle, if a consumer can prove a causal connection between the consumer fraud violation and the damages it claims, the consumer is entitled to treble damages on that claim.

In theory, the attorney-fee shifting provision was meant to encourage competent attorneys to take these cases which otherwise would be cost prohibitive for both the attorney and the consumer. In practice, unfortunately, this lofty goal is often not achieved. If a contractor is particularly evil and has fleeced the consumer (taken a large percentage or all of the cost of the improvement upfront, for example), chances are good that it is a “fly by night” operation and is long gone, judgment proof, or has moved on to the next scam in some other incarnation. There are often no monies for attorneys’ fees, no monies for damages, and no monies for treble damages. No one is held accountable and the system has failed.

Do an about face and look at this law from a legitimate contractor’s point of view. A single technical violation of the law, including the failure to get a change order signed or a fabrication by the consumer of an alleged oral misrepresentation he made, could expose the contractor to potentially thousands of dollars in attorneys’ fees even if the contractor did a spectacular job. Based upon this violation, the contractor may even be precluded from pursuing legitimate fees owed to him by the now wary and well-armed consumer. In many cases, a legitimate, honest, and good contractor may be undone by a law designed to protect against the lower elements of his profession.

In the end, like many laws, sometimes the consumer fraud law works and its lofty ideals are upheld. The defrauded consumer gets paid and rewarded, the “noble” lawyer recovers fees from the wrongdoer and all is right with the world. In practice, and more often than not, it is an exercise in frustration and futility. The illegitimate contractor is gone and the consumer is left with nothing but losses caused by the contractor, the lawyer is not paid by the wrongdoer and typically must compromise his fees to get anything from his own client, and injustice triumphs. Equally as frustrating is when a legitimate contractor, who did his job properly, is “stiffed” by the consumer and forced to pay attorneys’ fees on a technical violation that had nothing to do with the quality of his work and which the court ultimately determines caused no damages. This writer has represented clients on all parts of the spectrum in the consumer fraud arena. For a legitimate consumer going against an unscrupulous contractor, rarely have I seen justice. For a legitimate contractor defending a consumer fraud claim, there is absolutely no upside. Some attorneys representing contractors do not advise them of the power of this law and the consequences it can visit upon them. The exposure for attorneys’ fees - both your own and potentially the consumer - often dwarfs the amount of recovery the consumer is seeking. For a legitimate contractor facing a consumer fraud claim, even when he wins, he loses.

For more information or for a consultation about a lawsuit you are facing or one you are considering bringing, contact Mark D. Miller, Esq. at mdm@beinlaw.com. The firm can be reached at (908) 272-2232. For more information on consumer fraud, Mark Miller and The BeinhakerMiller Law Firm, LLC, visit their website at www.beinlaw.com.