Bait and Switch: Does there have to be a sale?

NO PURCHASE IS REQUIRED TO MAINTAIN A CLAIM OR AN ASCERTAINABLE LOSS UNDER THE NEW JERSEY CONSUMER FRAUD ACT

There is no requirement that the plaintiff have purchased any vehicle from the defendant to maintain a cause of action.

The New Jersey Consumer Fraud Act applies to this transaction and this contest/transaction since it: (a) falls within the definitional section of Sale and Advertisement, and (b) it is consistent with the interpretation of Miller v. Publishers Clearing House 284 N.J.Super. 67 (App.Div 1995)

Defendant’s efforts to sell cars through the marketing and advertising efforts on their web site warrant application of the Consumer Fraud Act. The New Jersey Consumer Fraud Act is clear on which transactions constitute a “sale” within the ambit of the New Jersey Consumer Fraud Act. See N.J.S.A. 56:8-1(e). The term “sale” shall include any sale, rental or distribution, offer for sale, rental or distribution or attempt directly or indirectly to sell, rent or distribute; NJSA 56:8-1 (emphasis added)

Further advertisement is defined by N.J.S.A. 56:8-1(a). The term “advertisement” shall include the attempt directly or indirectly by publication, dissemination, solicitation, endorsement or circulation or in any other way to induce directly or indirectly any person to enter or not enter into any obligation or acquire any title or interest in any merchandise or to increase the consumption thereof or to make any loan; N.J. Stat. Ann. § 56:8-1(emphasis added)

The Administrative Code is specific on what is a deceptive practice and it is clear that no sale is required. It is the refusal to sell that creates the deceptive practice.

Refusal to show, display, sell, or lease the advertised motor vehicle in accordance with the terms of the advertisement, unless the vehicle has been actually sold or leased during the period of publication; in that case, the advertiser shall retain records of that sale or lease for 180 days following the date of the transaction, and shall make them available for inspection by the Division of Consumer Affairs. N.J.A.C. 13:45A-26A.4 (emphasis added)

The Consumer Fraud Act specifically makes it a deceptive practice NOT to sell a product at the advertised price. Thus statutory responsibility and liability is based on NOT selling goods.

The advertisement of merchandise as part of a plan or scheme not to sell the item or service so advertised or not to sell the same at the advertised price is an unlawful practice and a violation of the act to which this act is a supplement.. N.J.S.A. 56:8-2.2

There is no requirement of a contract between the parties as held by the court:

Keeping in mind that “[t]he history of the [Consumer Fraud] Act is one of constant expansion of consumer protection,” *** this court holds that although some nexus is necessary to establish a claim under the Consumer Fraud Act, that nexus need only be between the alleged unlawful conduct and the ascertainable loss; it requires no contact between the parties only a measurable loss. Matera v. M.G.C.C. Grp., Inc., 402 N.J. Super. 30, 41 (Ch. Div. 2007)

In the present case the defendants ran the advertisement for a K.I.S.S promotion and when the plaintiff attempted to buy this car they refused to permit him to do so, contrary to their representations contained on their web site, radio advertisement and e mail.

A completed transaction is not necessarily required to maintain a cause of action under the New Jersey Consumer Fraud Act, especially when advertising is involved. The defendant’s assertion that there was no “purchase” of goods is insufficient to support a claim for dismissal. A completed sale is not required for liability or damages. The definitional section of the New Jersey Consumer Fraud Act defines a sale as an offer for sale or an attempt directly or indirectly to sell, rent or distribute. Consistent with this, it defines an advertisement as an attempt to directly or indirectly by publication or otherwise… to induce directly or indirectly any person to enter into an obligation.

An interpretation of the New Jersey Consumer Fraud Act in the definition sections to exempt offer for sales or advertisement from the New Jersey Consumer Fraud Act cannot be deemed consistent with the remedial purposes of the act. See Miller v. Publishers Clearing House 284 N.J.Super. 67 (App.Div 1995). There are specific cases which address the applicability of the Consumer Fraud Act to those who have sold no goods to the party plaintiff. See Cogar v. Monmouth Toyota 331 N.J. Super 1997 (App. Div. 2000). See Perth Amboy Iron Works v. American Home Assurance Co. 226 N.J. Super 200, 211 (App. Div. 1988), aff’d, 118 N.J. 249 (1990).

In both of these cases, the Appellate Division held the Consumer Fraud Act applicable to individuals and/or businesses who sold no goods to the plaintiff. In both of these cases, there were defendants who would not have sold any specific good to the plaintiff.

Courts have also held that there is no requirement that the claimant must have a direct contractual relationship with the seller of the product of service. See Levy v. Edmund Buick 270 N.J. Super 563, 601, (L. Div. 1993). The New Jersey Consumer Fraud Act clearly states that a claim could be “in connection with the sale or advertisement of any merchandise”. Again, the direct reading of the statute is consistent with the plaintiff’s allegations that this conduct is subject to the New Jersey Consumer Fraud Act. The New Jersey Consumer Fraud Act should be liberally construed to implement its remedial purpose.

The defendant’s promotion was within the jurisdiction and definition section of the New Jersey Consumer Fraud Act. The Consumer Fraud Act applies to promotions with no sale of good. The Appellate Division in Miller v. Publishers Clearing House 284 N.J.Super. 67, 7 (App.Div 1995) has held that contest/promotion such as this are subject to the applicability of the New Jersey Consumer Fraud Act. In Miller, the defendant was American Family Publishers who was a seller of magazine subscriptions and used Ed McMahon and Dick Clark to provide the prize money and appear on The Today Show. The defendant would engage in the sale of magazine subscriptions, mass mailings (advertising and promotion) with various claims of future contest winnings to potential entrants.

The defendant provided awards including four awards of $10 million and three awards of $2 million. The plaintiffs in Miller were four persons who had entered the contest and two who had not purchased subscriptions. The defendant in Miller stated that the plaintiff need not buy a subscription to enter the contest. The plaintiffs asserted that the wording of the contest was misleading. The Appellate Division determined that all the plaintiffs had a cause of action under the New Jersey Consumer Fraud Act whether or not they had purchased a subscriptions for magazines or not. Clearly there were two individuals who had not even purchased subscriptions or even entered the contest. Miller v. Publishers Clearing House 284 N.J.Super. 67, 72 (App.Div. 1995).