New Jersey Consumer Protection Laws: Lemon Law, Refunds, Repairs and Scams

New Jersey's New Car Lemon Law applies to anyone who buys, leases or registers a new car or motorcycle in New Jersey; it also covers authorized emergency vehicles and portions of motor homes, but not vehicles registered for commercial use or motor home living quarters. Protection lasts 24,000 miles or two years from delivery. The defect must substantially impair the vehicle's use, value or safety, or be a serious safety defect likely to cause death or serious bodily injury. After two failed repair attempts for the same defect, or after the vehicle has been out of service for a total of 20 days (45 days for a motor home), or after one attempt for a serious safety defect, the consumer must send the manufacturer a certified "last chance" letter; the manufacturer then has 10 days to repair. If the defect remains, the consumer can apply to the Division's Lemon Law Unit for a hearing before an administrative law judge (filing fee $50, refunded if the consumer wins) and may be entitled to a refund. If the consumer wins, the manufacturer must pay reasonable attorney's fees.

New Jersey has a Used Car Lemon Law. A dealer (anyone who sold three or more used cars in the past 12 months) must give a consumer a written warranty on covered engine and drivetrain parts of at least 90 days or 3,000 miles for cars with 24,000 miles or less, 60 days or 2,000 miles for cars with more than 24,000 but under 60,000 miles, and 30 days or 1,000 miles for cars with 60,000 miles or more. The consumer may be charged a $50 deductible per repair. If the dealer fails to fix a material defect after a reasonable opportunity (presumed after three or more repair attempts for the same defect, or 20 or more days out of service, during the warranty), the dealer must buy the car back and refund the purchase price (excluding taxes and government fees), less allowances for excessive wear and personal use. If the dealer does not give the warranty, it is deemed given by law. A buyer of a car with more than 60,000 miles may waive the warranty in a separately signed writing after negotiating a price adjustment and buy it "as is." The warranty requirements do not apply to cars sold for less than $3,000, cars seven or more model years old, cars with more than 100,000 miles, or insurance total-loss cars disclosed in writing. Dealers must also disclose known material defects and explain in writing what "as is" means if a car is sold that way.

A home improvement contract may be cancelled by the consumer for any reason before midnight of the third business day after the consumer receives a copy of it. Cancellation must be in writing, sent by registered or certified mail (return receipt requested) or delivered personally to the contractor's address in the contract. All money paid must be refunded within 30 days of the contractor's receipt of the cancellation notice, and any credit or loan arranged through the contractor must be cancelled without penalty. The contract must contain a printed notice of this right.

The New Jersey Consumer Fraud Act (N.J.S.A. 56:8-1 et seq.) prohibits fraud, deception, misrepresentation and similar practices in the sale or advertisement of merchandise or real estate. Consumers can sue: anyone who suffers an ascertainable loss of money or property because of an unlawful practice may bring an action or counterclaim, and the court must award three times the damages, plus reasonable attorneys' fees, filing fees and costs of suit. The Division of Consumer Affairs enforces the Act.

Under Division of Consumer Affairs rules, an auto repair dealer may not start paid work without the customer's signed written authorization (or documented oral authorization if the car is dropped off after hours or by someone else), and must give a written estimate before work begins—either a not-to-exceed price, a detailed parts-and-labor breakdown, a price for a specific repair, or a written authorization up to a set dollar amount—unless the customer waives the written estimate in a signed statement. A diagnostic charge must be agreed to in advance. The shop may not charge more than the estimate without the customer's oral or written consent obtained before the extra work is done. Replaced parts must be returned if the customer asks before work starts (except exchange or warranty-return parts, or parts impractical to return). The invoice must itemize parts and labor and state whether new, rebuilt or used parts were installed. Shops must post a sign telling customers these rights.

It is unlawful to sell or offer to sell, during a declared state of emergency (within 30 days after the declaration, or another period the Governor sets), in the emergency area, goods or services consumed or used as a direct result of the emergency or to preserve life, health, safety or comfort, at an excessive price increase. A price is excessive if it is more than 10 percent above the seller's price just before the emergency, or, where the increase reflects higher supplier or other costs, if the seller's markup from cost is more than 10 percent above its usual markup. A state of emergency may be declared by the President, the Governor, or a municipal emergency management coordinator.

Underlying funds on a gift certificate or gift card may not expire within 24 months after the date of sale. No dormancy fee may be charged within 24 months after the sale or within 24 months after the most recent use, and any permitted dormancy fee may not exceed $2.00 per month. Any expiration date or dormancy fee, and a phone number for information, must be disclosed in at least 10-point type on the card, receipt or package. For stored value cards treated as gift cards, if a balance of less than $5 remains after a purchase, the merchant must refund it in cash at the owner's request.

Under the Refund Policy Disclosure Act, every retail store must conspicuously post its refund policy on a sign attached to the item, at each register, visible from the register, or at each public entrance. The sign must say whether the store gives refunds and under what conditions, including for sale or "as is" items, without proof of purchase, time limits, and whether refunds are in cash or store credit. A store that violates the Act must give the buyer, for up to 20 days after purchase, a cash refund or credit at the buyer's option if the item is unused and undamaged. Stores that already give cash refunds (or credit for credit purchases) on unused, undamaged goods returned within at least 20 days do not have to post a sign.

Debt adjusting—acting for pay as an intermediary between a debtor and creditors—requires a license from the New Jersey Department of Banking and Insurance under the Debt Adjustment and Credit Counseling Act, and only a nonprofit corporation can be licensed as a debt adjuster. Government approvals such as HUD housing-counselor status do not replace the license.

Home improvement contractors must register annually with the Division of Consumer Affairs (with some exemptions, such as licensed trades acting within their license and new-home builders registered under a separate law). Every home improvement contract over $500, and every change to it, must be in writing and signed by all parties, and must include the contractor's legal name, business address and registration number, a copy of its liability insurance certificate and the insurer's phone number, and the total price including finance charges. Division rules also require the contract to describe the work and principal materials and state the start and completion dates or time period and any guarantee. Consumers may cancel within three business days (see cooling-off). Violations are unlawful practices under the Consumer Fraud Act, and knowing violations are a fourth-degree crime.

Any business that conducts business in New Jersey (and any public entity) must disclose a breach of security of computerized personal information to New Jersey residents whose information was, or is reasonably believed to have been, accessed by an unauthorized person. Notice must be given in the most expedient time possible and without unreasonable delay, consistent with law enforcement needs and steps to determine the scope of the breach. Notice is not required if the business establishes that misuse is not reasonably possible (documented in writing and kept for five years). Before notifying customers, the business must report the breach to the New Jersey State Police. If more than 1,000 people must be notified, the nationwide consumer reporting agencies must also be told.

The Division of Consumer Affairs' Office of Consumer Protection handles consumer complaints. Its Consumer Service Center (973-504-6200 or 1-800-242-5846) is the central clearinghouse for complaints and referrals. Consumers should first try to resolve the problem with the business, then file a written complaint with the Division using its complaint form, describing the problem, what has been done and what remedy is wanted, with copies (not originals) of receipts, contracts and other documents. Complaint forms may be subject to public disclosure under the Open Public Records Act.

1) Report defects to the manufacturer or dealer right away and keep all repair receipts and a record of contacts. 2) Final repair attempt ("last chance" letter): before filing with the state, the consumer must send a letter to the manufacturer (not the dealer) by certified mail, return receipt requested, giving it one final chance to repair. The letter can be sent after two failed repair attempts for the same defect, after the vehicle has been out of service a total of 20 days (45 days for a motor home), or after one attempt for a serious safety defect. It must reach the manufacturer before 24,000 miles and within two years of delivery, at the regional address supplied by the Division of Consumer Affairs' Lemon Law Unit. The manufacturer then has 10 days from the date on the return receipt to repair. 3) State dispute resolution: if the problem continues, the consumer asks the Lemon Law Unit for a Lemon Law Dispute Resolution application. The Unit reviews it; once approved, the consumer pays a $50 filing fee (refunded if the consumer wins). A hearing is usually set within 20 days of acceptance, subject to Office of Administrative Law availability, before an administrative law judge in Newark, Trenton or Atlantic City. The judge issues an initial decision within 20 days, and the Director of Consumer Affairs issues a final decision within 15 days after that. To qualify for a hearing, the Division says the consumer must have had three repair attempts, sent the certified "last chance" letter in time, given the manufacturer the final repair chance, and still have the defect. A lawyer is not required; if the consumer wins, the manufacturer pays reasonable attorney's fees.