Consumer Fraud Act Requirements for New Jersey Contractors
New Jersey is a state that strongly favors consumer protection. This is evident by the expansion of the state’s Consumer Fraud Act in 2005. The 2005 law brought home repair and home improvement contractors under the purview of the act, imposing new requirements on contractors for the protection of consumers in New Jersey against any potential fraud.
Consumer Fraud Act Requirements
The first of the Consumer Fraud Act requirements imposed on contractors is a demand to register with the Division of Consumer Affairs. Every contractor is required to register annually. The registration requirement applies to any contractor who advertises publicly to gain new customers. While there are several limited exceptions to the registration requirement, it is best to consult an attorney on this issue. Also, as a further requirement of the Act, contractors are required to carry general liability insurance of $500,000 per occurrence at a minimum.
Contractors are also required to display their registration numbers in a number of places when doing business. Registration numbers are required to be displayed in a contractor’s place of business, on all advertisements, on any business documents, contracts, and customer correspondence, and on all commercial vehicles. The Act further requires a toll free number be provided for customers on any invoices provided to customers.
Perhaps the most detailed requirement that contractors must meet is the writing requirement for certain home improvement contracts under the Act. All home improvement contracts over $500 and any changes in terms and conditions on home improvement contracts are required to be set out clearly in writing and signed by both parties (the contractor and the customer). The contract has to “set forth in legible form and in understandable language all terms and conditions” including:
1. The legal name, address, and registration number of the contractor
2. A copy of the contractor’s general liability insurance, including the insurer’s telephone number
3. The total price of the contract, including any finance charges
4. A conspicuous notice informing customers of their right to cancel the contract using the language provided in the act
Punishment for Violation of the Consumer Fraud Act
It is important for contractors to understand and follow the Act to avoid expensive court battles as well as monetary penalties. Failure to provide a proper written contract to a customer can result in a “per se” violation of the Act, meaning that the consumer does not have to prove the contractor intended to violate the law.
Violations also provide for the imposition of triple damages and reimbursement of reasonable attorney’s fees and costs. These are not issues to leave to Ensuring Compliance with the Act While the Consumer Fraud Act and other regulatory legislation can seem unnecessarily complicated to a contractor simply trying to do their job, our representative government has deemed it necessary to protect consumers from the few bad apples that may be out there with this legislation. The best thing to do to ensure compliance with the Consumer Fraud Act is to consult with a local Moorestown business attorney. A good attorney can explain all of the applicable provision of the Consumer Fraud Act and make sure you are meeting all of the requirements.