Warranty Fraud in New Jersey
CONSUMER FRAUD – FAILURE TO DISCLOSE TERMS OF WARRANTY
In New Jersey there are many rules for selling and marketing warranties such as disclosing all terms and conditions to customers. The law says all terms and condition must be disclosed to all consumer and the failure to do so violated New Jersey Law on this issue
The conduct in the current case also violates the New Jersey Consumer Fraud Act based on the dealer’s statutory violation of the said Act.According to the New Jersey Consumer Fraud Act, the dealer is required to disclose all the relevant terms of the warranty and/or the service contract.See N.J.S.A. 56:8-68.
This issue was directly addressed in Cannon v. Cherry Hill Auto Mall, 161. F. Supp. 2d 363.In Cannon, the selling dealer sold the plaintiff a service contract and kept a portion of the proceeds.The Federal Court in Cannon held that the dealer’s failure to properly and honestly disclose the retention of funds kept by the dealer and forwarded to the third party constitute a violation of both the Truth in Lending Act and the New Jersey Consumer Fraud Act.The Court specifically held that ‘Cherry Hill’s failure to correctly disclose its profits on the MBH buy instead indicating the entire amount was paid to interstate is a violation of N.J.S.A. 56:8-67(g)’.
Although it was specifically service contract in Cannon v. Cherry Hill, the statutory reference previously set forth also covers warranties.This is a statutory violation (PER SE) violation of the CFA.The damages are the amount of money collected and paid to the manufacturer.
Consumer fraud related to the sale of warranties is rampant in the state of New Jersey. This is one of the most common areas for fraud and consumer fraud with regard to the sale of used and new vehicles. It is not a comment for a specific dealerships or salespeople to misrepresent the terms and conditions of a lease when the sale of a vehicle and a warranty occurs.
The same principles that are applicable to affirmative misrepresentations of material omissions of fact are applicable to the sale and marketing of warranties by use the new car dealers. It is imperative that the seller of these products or services must make accurate and complete representations as to the nature and extent of the product which is being sold. The consumer would have a claim or cause of action if the consumer has sustained a loss for an ascertainable loss associated with the purchase or acquisition of the subject product. An example would be if a consumer was lied to about coverage on the specific warranty then needed repairs associated with that specific area and the repairs were denied. The consumer might have a claim for an ascertainable loss associated with the repairs of the automobile.
The New Jersey Consumer Fraud Act should be liberally construed to demonstrate a claim against those that misrepresent the terms and conditions of the warranty and those that sell warranties that are deceptive with inherently deceptive limitations and waivers of various rights which are not permitted under New Jersey law.
A warranty cannot be sold that is in essence worthless or has a significant limitation. Under which a claim can be made. An ascertainable loss was associated with these deceptive practices then there would be a claim