New Jersey’s Deceptive Business Practices Law: What You Need to Know

New Jersey’s deceptive business practices law, found in Section 2C:21-7 of the state’s criminal code, aims to crack down on dishonest and fraudulent business activities. As a business owner or employee in New Jersey, it’s important to understand what this law prohibits so you can avoid running afoul of it.

What Does the Law Prohibit?

The deceptive business practices law prohibits things like:

• Using false weights or measures in business transactions. This could mean rigging scales to charge customers for more product than they actually receive, or adjusting gas pumps to dispense less fuel than displayed.
• Making false statements in advertisements about products or services. This includes exaggerating claims or leaving out important details that could mislead consumers.
• Engaging in bait-and-switch tactics by advertising a deal that doesn’t exist just to lure in customers.
• Failing to provide services or goods that were paid for. For example, taking payment upfront for a product you never intend to deliver.
• Overcharging for goods or services through deception. This could include adding hidden fees or incorrectly tallying bills.
• Falsely claiming a product is of a certain origin, grade, trademark or certification. Like claiming jewelry is real diamonds when it’s not.
• And other shady practices meant to scam or cheat customers.

As you can see, the law aims to prohibit a wide range of dishonest business activities. The key is that the deception has to be intentional, not just an honest mistake.

What Are the Penalties?

Violating New Jersey’s deceptive business practices law is not taken lightly. Depending on the specific offense and dollar amount involved, it can be charged as a disorderly persons offense or different degrees of crime:

• Disorderly Persons Offense: Up to 6 months in jail and a fine up to $1,000
• 4th Degree Crime: Up to 18 months in jail and a fine up to $10,000
• 3rd Degree Crime: 3-5 years in prison and a fine up to $15,000
• 2nd Degree Crime: 5-10 years in prison and a fine up to $150,000
• 1st Degree Crime: 10-20 years in prison and a fine up to $200,000

As you can see, penalties quickly escalate based on the severity of the deception. Fines can also be much higher when large dollar amounts are involved.

Real World Examples

To understand how this law is applied, let’s look at some real world examples of deceptive business practices that resulted in charges:

• The owner of a gas station was charged with a 3rd degree crime for rigging his gas pumps to dispense less fuel than displayed on the meter. This scammed customers out of gallons of gas over time.
• A home improvement contractor faced a 2nd degree charge for taking large down payments from homeowners but never completing the work. He defrauded victims out of over $500,000 through this bait-and-switch.
• The CEO of a medical testing lab pled guilty to fraud for falsifying thousands of claims to Medicare and private insurers. This netted the company over $100 million in the scheme.
• A jewelry store owner was charged with a 3rd degree crime for selling fake custom jewelry falsely claimed to be made of real precious metals and stones.

As you can see, authorities take these deceptive practices very seriously, with multi-year prison sentences and major fines on the line.

Defenses and Mitigating Factors

If you find yourself facing charges under this law, all hope is not lost. Here are some potential defenses and mitigating factors that could help:

• Lack of intent – If the deception was accidental or due to a misunderstanding rather than intentional fraud.
• No harm occurred – If you caught the error quickly and customers suffered no financial loss.
• Cooperation – Admitting wrongdoing and aiding prosecutors can help secure a plea deal.
• No prior offenses – First time offenses often result in more lenient sentencing.
• Restitution – Repaying victims helps demonstrate remorse and acceptance of responsibility.
• Procedural errors – Mistakes in how the case was handled, like issues with evidence or Miranda rights.

Don’t be afraid to consult an experienced criminal defense lawyer if you’re facing an investigation or charges under Section 2C:21-7. They can fully evaluate the case against you and build the strongest defense to mitigate penalties.

How to Avoid Trouble

The best way for New Jersey businesses to avoid running afoul of this law is to proactively put practices in place to prevent fraud and deception:

• Audit advertising and marketing materials to ensure accuracy and transparency for customers.
• Conduct staff training on ethical business practices and the severe penalties for violations.
• Implement compliance checks and balances in billing, inventory and other financial matters to catch errors early.
• Perform regular audits on weights and measures equipment to verify accuracy.
• Document transactions, estimates and other customer interactions to avoid miscommunications.

By making honesty and transparency core values of your business, you can steer clear of the serious penalties under this deceptive business practices law. If issues do arise, consult experienced legal counsel promptly to protect your rights. With proper precautions, New Jersey businesses can thrive while adhering to fair and ethical business standards.