Who is Eligible as a Consumer to File a Consumer Fraud Case?

Remember earlier I referenced that only a person could bring a case under the CFA? The CFA defines the term “Person” to be the following:

  • an individual or their legal representative (i.e., POA, guardian, parent of a minor);
  • a partnership;
  • a corporation;
  • a LLC
  • a company;
  • a trust;
  • an unincorporated business entity or association (example: a proprietorship);
  • “any agent, employee, salesman, partner, officer, director, member, stockholder,
  • a trustee of the above listed entities/persons.”

Certain legal requirements must be satisfied to file a case under the Consumer Fraud Act (CFA).

First off, there must be some connection between the injured consumer and the merchant doing business in New Jersey. This connection is often called a “nexus”. New Jersey courts view nexus requirements liberally. Satisfaction of the nexus requirement gives the consumer legal standing to bring a claim. Standing and nexus are key provisions of the law.

Examples of nexus and standing include being (1) a resident of NJ when purchasing goods or services within the geographical boundaries of the state, or (2) being a seller/merchant who operates a business in New Jersey when the alleged unlawful practice took place, or (3) being a seller or service provider located in NJ who advertises and/or markets and/or sells to consumers who live outside of NJ.

In addition to meeting the nexus and standing requirements to qualify to bring a CFA claim, you must:

  • be a person as defined by the CFA (see definition of the term “person” above);
  • suffer an ascertainable (meaning provable) loss of money or property as a result of an unlawful practice under the Act;
  • “have a real interest in the outcome of the litigation” meaning you are the actual victim and not an agent for the victim;
  • experience real harm because of the unlawful action. Note, however that advertisements may alone suffice to confer standing under the CFA.

Who is Vulnerable to a CFA Claim? Why the Term “Merchant” is Important Under the Law?

The CFA makes reference to “merchant” to describe a seller of goods or services subject to the Act vs. a casual seller who is excluded from liability under the law. But note that the CFA often applies to part-time merchants. For example, courts applied the CFA to the following:

  • A part-time baker or hairstylist operating out of his or her home without any signage or other advertising.
  • A vendor at a local flea market with a dedicated area to sell goods.
  • An internet-based retailer operating nationally from a fixed location in NJ.
  • Even banks engaging in the sale of real estate for profit.

The CFA is not applicable to everyone and to all matters. Exclusions apply to:

  • The seller of a single automobile on the internet.
  • An incidental seller of “something” (you pick the something) on Facebook Marketplace (you get the idea).
  • Homeowners who sell their residence without realtors.
  • “Learned professionals” such as attorneys, physicians, dentists, accountants or engineers.

An Out-of-State Resident Can Bring a CFA Action in NJ

The CFA is not just for the protection of New Jersey residents. More broadly, the CFA prohibits unlawful practices that take place or originate in New Jersey. A claimant’s place of residence is irrelevant as long as the basis of the claim originates with a New Jersey merchant even if the buyer is an out-of-state resident.

An out-of-state claimant who seeks to take advantage of NJ’s liberal Consumer Fraud Act must satisfy the same criteria imposed upon a NJ resident. If so, they can bring their case to NJ even if their own state’s laws will not allow it.

Yes, a NJ Business Can Be a Consumer Under the NJ Consumer Fraud Act

The CFA not only provides protection to individual consumers, it has been found by the NJ courts to include businesses like a for-profit business, a corporation, an LLC, partnership, etc.) that is injured by the prohibited conduct under the Act.

Have questions about a consumer fraud matter; not sure if you qualify to take legal action or face a threat of a lawsuit as a merchant? Then please contact call Fredrick P. Niemann personally at toll-free (855) 376-5291 or e-mail him at fniemann@hnlawfirm.com. He welcomes your inquiries.

Fredrick P. Niemann Esq.



Consumer Fraud Act Attorney Serving These New Jersey Counties:

Atlantic County, Bergen County, Burlington County, Camden County, Cape May County, Cumberland County, Essex County,
Gloucester County, Hudson County, Hunterdon County, Mercer County, Middlesex County, Monmouth County,
Morris County, Ocean County, Passaic County, Salem County, Somerset County, Sussex County, Union County, Warren County