The New Jersey Consumer Fraud Act is to be Watered Down, significantly.
New Jersey has one of the strongest Consumer Fraud Acts in the United States.
There is pending legislation to change the Consumer Fraud Act and make it easier to avoid civil penalties for fraud.
Amy Handlin and John McKeon are sponsoring an anti-consumer bill that would change the business landscape in New Jersey.
A key provision of the new New Jersey Consumer Fraud Act would exempt out of state transactions. This means the following: if someone in New Jersey commits consumer fraud upon a non-resident (living in NY, PA or CT) there are no consequences.
“a. apply only to transactions that take place in the State”
Car Salesmen and Dealerships to be Protected with Proposed Changes in Consumer Fraud Act.
Amy Handlin and Jack McKeon have sponsored and introduced ANTI-CONSUMER legislation to reduce consumer rights and protect car dealerships.
The changes in the Consumer Fraud Act would exempt or limit liability against businesses that are already regulated, such as car dealerships. It would also limit liability for consumers who consummate out-of-state transactions. This arguably contradicts other legislation that has been introduced to increase liability for those committing consumer fraud.
CHANGES IN THE NEW JERSEY CONSUMER FRAUD ACT TO PROTECT CAR SALESMAN
Amy Handlin is the co-sponsor on this bill to protect car salesman
John McKeon is the primary Sponsor on this bill to protect car salesmen.
It is not uncommon that there is absolutely no disclosure to the sales staff and they are not even given what is commonly known as a deal recap or some sort of washout sheet. It is not uncommon that the sales staff is completely left in the dark pertaining to how their commissions are calculated, what the costs are, what the charge backs are and other reductions. There is a natural tendency upon the sales staff to doubt the costs associated with the sale of the automobiles. If the pack is only $500, why did an apparent $3,000 profit vanish overnight and turn into a $100 flat fee?
This is an area of heated and ongoing litigation between sales staff and dealership management. How exactly are the gross commission on profits calculated, charge accounted for and disclosed to the sales staff? It is not uncommon that there is absolutely no disclosure to the sales staff and they are not even given what is commonly known as a [tail recap] or some sort of washout sheet. It is not uncommon that the sales staff is completely left in the dark pertaining to how their commissions are calculated, what the costs are, what the charge backs are and other reductions in the gross commissionable proceeds.
The same laws that apply to contracts apply to agreements between sales staff and their management team. There is an obligation of good faith and fair dealings and there is an obligation pertaining to full disclosure. I have discovered that it is not uncommon that there are various “extras” that the dealership management feels obligated to put into the costs of the vehicle for which a sales staff member might be upset.
The auto sales business is a major tax source for all states, including New Jersey. In this regard, many states have hundreds, if not thousands of dealerships, which generate billions of dollars in tax revenue for the state coffers. All these dealerships rely upon the skills of sales people to sell cars in order to benefit themselves as well as the state economy. It is an ongoing battle between the sales persons and management pertaining to the issuance and calculation of gross commissionable proceeds upon which sales people are paid.
Generally, there are two areas of profit to the dealership,
the front end and the back end. The front end is associated with the profit on the sale of the car and of itself. The back end profit pertains to and relates to the profit on financing, after sale items, pre-delivery services and other items, such as lo-jack. Car dealerships operate differently, however; generally, the sales people get paid on the front end and the managers and the upper management get paid on the back end of the transaction. On occasion, a car dealership does provide a certain amount of computation to the sales staff based on the total profit of the dealership, which would naturally include the back end or the reserve part of the transaction.
WRONGFUL REPOSSESSION CLAIMS, CLASS ACTIONS AND CONSUMER FRAUD
A brief review of the internet on the search wrongful repossession class action will yield a plethora of results indicating that this is an extensive, ripe and very litigious area of law both on the individual and class action basis. When you are dealing with wrongful repossession on an individual basis or a wrongful repossession on a class action basis, it seems to mostly arise out of the processing of paperwork either before, during or after the actual repossession.
On occasion, the wrongful repossession deals with the inappropriate conduct of a repossession company or an agent of the repossession company. However, as previously set forth, most of the lawsuits, class actions and wrongful repossession, and consumer fraud lawsuits arise out of the post-repossession notice of intent to sell and post-sale paperwork, which would include necessary accounting.
As previously stated in many of these posts, the dealers frequently use arbitration agreements as a method by which they bypass the court system. There are numerous organizations, including JAMS, NAF and American Arbitration Association. All of these organizations ordinarily have consumer due process protocols for these arbitrations. The question is what happens when you win an arbitration and the dealership refuses to pay the arbitration award? Unfortunately, this is not an easy process, but there is a provision in the Uniform Arbitration Act for the Superior Court to confirm an arbitration award entered by an arbitrator. Basically, the petitioner must file an order to show cause (fancy words for a court action) to confirm the arbitration award so as it can be entered into the docket system and be docketed against the dealer’s property. There is an entire provision under the court rules for a filing of an order to show cause and it is relatively complicated. Nonetheless, the Court is permitted to confirm this arbitration award so long as there is not a basis to vacate the arbitration award filed by the loser of the arbitration. Once the arbitration award is confirmed by the Superior Court, it becomes a judgment docketed and the petitioner or plaintiff may use this docketed judgment or award as any other docketed judgment or award. Moreover, the Uniform Arbitration Act provides for the payment of counsel fees and costs associated with domesticating or confirming an arbitration award. The New Jersey Consumer Fraud Act also provides for the payment of counsel fees with the collection of a consumer fraud judgment. This was decided in the case of Tankersley, wherein the Appellate Division held that an attorney who was attempting to collect judgment on a consumer fraud award would be entitled to counsel fees and costs. The Tankersley case involved the collection of a judgment against a car dealership.
Appearance Package, Wheel Well Molding, Door Edge Guards
Some dealerships use the sale or attempted sale of door edge guards, wheel well molding or pin striping, commonly known as appearance packages, to increase the costs of the vehicles. Frequently, these pre-delivery services are not included anywhere in the buyer’s order but only on a price addendum placed on the automobile. New Jersey law is relatively straightforward and requires a consumer to sign off and acknowledge the purchase of any pre-delivery services on the sale of an automobile. The dealership uses the guise of these expensive products, which increase the “sticker” price of a vehicle. When the customer sits downs and looks at all the paperwork, it is not apparent that these items are included in the price anywhere. This is the intention behind the New Jersey Consumer Fraud Act and the associated Administrative Code regulations requiring consumers to acknowledge purchase of pre-delivery services. Even if these were considered aftermarket items or different types of products, it would still be appropriate for the dealer to disclose the nature and extent of these products, any warranties that were associated with these products, and the costs thereof. The best advice would be to be very careful in the injunction of negotiating a purchase price on a new vehicle and demand for an itemization of any and all products and/or services that you are acquiring or think you are acquiring as part of the automobile purchase. The dealership is required to disclose this to you fully and honestly and the best way to do this would be to bring a piece of paper where the dealership would sign off on the specific products which you are purchasing. This would forego any potential confusion and document exactly what you are and are not purchasing.
This is a must watch. Who likes car salesman?
New Jersey Lemon Law Lawyer Blog