Consumer Protection Law: New York’s consumer protection laws generally prohibit deceptive acts or practices when conducting business or providing services. Where a person or entity has engaged in a deceptive act or practice, the injured consumer may commence a private cause of action and recover either actual damages or statutory damages in the amount of $50.00, whichever is greater.
However, the Court has discretion to increase actual damages subject to certain constraints in situations involving an individual or entity that willfully engaged in a deceptive act or practice. But, this discretion is limited in that the amount cannot exceed three times the actual damages up to $1,000.00. In addition, and unlike New Jersey’s mandatory attorneys’ fee shifting provision in its Consumer Fraud Act, New York courts have wide discretion to award or not award attorneys’ fees to a prevailing consumer.
New Jersey’s Consumer Protection Act is superior to New York’s in a number of other respects. In New Jersey, there is no limit on the compensatory amount; it is tripled automatically; and there is a very elaborate set of regulations that define what is a per se violation of the Consumer Fraud Act. In sum, if a transaction involves both New York and New Jersey, careful attention should be given to decide whether New Jersey’s enhanced remedies are available.
Much of the law of consumer fraud relates to class actions. Recently, class actions have been brought by consumers alleging deceptive acts or practices in violation of New York’s consumer protection laws. Many of these claims are based on the failure of a seller to disclose a material fact about a product or service being offered for sale. Although class actions may prove effective where a seller repetitively engages in deceptive acts and practices, the Court will first have to certify the class of consumers. In accordance with general principals of law, the Court will likely not certify a class where the class is overbroad or the claims among the class members are distinct.
It is truly important to carefully evaluation the potential of consumer protection related claims to determine the preferred laws under which to sue and whether it should be structured as an individual lawsuit or a class action, among other things.
© 2008 Nissenbaum Law Group, LLC