Auto fraud remains a persistent issue in New Jersey, with deceptive dealerships, hidden vehicle defects, title-washing schemes, and financing fraud among the most common scams. Fortunately, state laws provide strong consumer protections, allowing victims to seek remedies when they’ve been misled.
This article examines New Jersey’s legal framework on auto fraud, recent enforcement actions, and what consumers should watch out for.
Auto Fraud Under the New Jersey Consumer Fraud Act (CFA)
New Jersey has one of the most consumer-friendly laws in the country when it comes to auto fraud: the New Jersey Consumer Fraud Act (CFA) (N.J.S.A. 56:8-1, et seq.). This law makes it illegal for dealerships, private sellers, or financing companies to engage in:
• Misrepresentation or Concealment – Failing to disclose material defects, previous accident history, or odometer rollbacks.
• Bait-and-Switch Tactics – Advertising vehicles at low prices that are unavailable and then pressuring buyers into more expensive models.
• Undisclosed Fees – Adding hidden charges for documentation, delivery, or extended warranties that were not clearly disclosed.
• Loan and Financing Fraud – Inflating income on loan applications or misrepresenting interest rates to push consumers into bad loans.
• Title Washing – Selling vehicles with hidden flood or salvage histories without properly disclosing their status.
A CFA violation entitles victims to triple damages (treble damages) and attorney’s fees, making it a powerful tool for those scammed by unscrupulous dealers.
Recent New Jersey Auto Fraud Cases & Enforcement Actions
New Jersey authorities have been cracking down on deceptive auto practices in recent years. Some recent notable cases include:
• Multiple Dealerships Fined for Deceptive Practices (2023-2024) – The New Jersey Division of Consumer Affairs reached settlements with six dealerships over fraudulent advertising and hidden fees, totaling nearly $260,000 in penalties. Dealers falsely advertised vehicle prices online, then tacked on undisclosed fees when consumers arrived.
• Title-Washing Crackdown (2023) – Investigations revealed that some dealerships were illegally re-titling flood-damaged vehicles to remove salvage branding before selling them as clean titles. This led to increased penalties and regulatory oversight.
• Finance Fraud Cases on the Rise (2024) – The state has seen a rise in dealerships submitting falsified credit applications, inflating customer incomes to secure approvals on unaffordable loans.
These cases show that New Jersey is actively enforcing consumer protection laws, but fraud remains widespread.
How Consumers Can Protect Themselves from Auto Fraud
If you’re buying a car in New Jersey, follow these key steps to avoid auto fraud:
1. Get a Vehicle History Report – Use Carfax or AutoCheck to check for accidents, flood damage, or odometer rollbacks.
2. Read the Fine Print – Review all contracts carefully, especially for hidden fees or excessive interest rates.
3. Verify Title Status – Check with the New Jersey Motor Vehicle Commission (MVC) to confirm a vehicle’s true title status.
4. Inspect the Car Thoroughly – Hire an independent mechanic for a pre-purchase inspection, even for certified Pre-owned vehicles.
5. Beware of High-Pressure Sales Tactics – Walk away from deals that seem rushed or too good to be true.
What to Do If You’ve Been a Victim of Auto Fraud
If you believe you’ve been scammed by a dealer or private seller, you have legal options:
• File a Complaint – Report the fraud to the New Jersey Division of Consumer Affairs.
• Consult an Auto Fraud Attorney – You may be entitled to compensation, contract cancellation, or treble damages under the CFA.
• Take Legal Action – A lawsuit under the CFA can force dealerships to pay triple the damages plus your attorney’s fees, making legal action a strong option for significant fraud cases.
Final Thoughts
New Jersey offers some of the strongest auto fraud protections in the nation, but scams are still rampant. By knowing your rights under the Consumer Fraud Act and Lemon Law, you can protect yourself from shady dealers and dishonest sellers. If you’ve already been a victim, legal options exist to recover your losses and hold fraudsters accountable.
For those needing assistance, working with an experienced auto fraud attorney can make all the difference in fighting back against deceptive car sales practices.