Consumers League fights for the rights of consumers. Since
1900, the Consumers League of New Jersey has represented your
interests against slippery salesmen and their friends in the
halls of Congress and the state Legislature.
CLNJ Opposes A.3333 (2011), which evicerates N.J.'s Consumer Fraud Act.
The Consumers League, through its President Robert Russo has isued a statement opposing N.J. bill A.3333 (2011). Click here to read Mr. Russo's opposition. CLNJ President Robert Russo is the former Mayor of Montclair, and has retired as head of the Lemon Law unit at N.J. Division of Consumer Affairs..
What is wrong with A.3333?
First, A.3333 destroys the Consumer Fraud Act’s strong remedy of triple damages by making it discretionary, not mandatory as it currently stands.
Second, A.3333 totally immunizes any company from any duty to comply with the Consumer Fraud Act if that company is regulated by any state or federal agency! Home repair contractors must get a license from the NJ Department of Banking. The N.J. Division of Consumer Affairs also has regulations about home repair contracts. Under A.3333, the existence of regulation means that the company is now unregulated! This absurd “Catch 22” cripples New Jersey’s law enforcement against consumer fraud.
Third, A.3333 makes it harder for consumer to win a case by inserting that it is not enough to be swindled, but that the consumer must prove “reliance,” a tricky legal obstacle that the N.J. Legislature wisely never inserted into the CFA. The need to prove individual reliance, also kills consumer class actions. Consumers cannot band together when thousands of consumers are swindled out of modest amounts. Each victim must file her own lawsuit, and each must prove "reliance," but that will be impossible because attorneys won’t accept cases for such small amounts.
Fourth, A.3333 limits the amount of attorneys fees which the consumer lawyer (only) can recover in bringing a scammer to justice. There is no limitation on the attorneys fees which the fraudulent business may spend to bury the consumer attorney in motions, depositions and litigation costs. The intent is to discourage lawyers from acting as private attorneys general when the State is too busy to bring the suit, and to break the back of courageous consumer litigators.
Fifth, New Jersey’s small businesses would no longer be able to use the Consumer Fraud Act to sue companies which defraud them.
Sixth, A.3333 immunizes out-of-state scammers who defraud N.J. residents! If an internet company in Utah wants to charge illegal interest of 500% on a payday loan made to a NJ resident, then the victim might not be able to use the Consumer Fraud Act to sue the out-of-state scammers! New Jersey wisely prohibits debt consolidation scams, where the company collects $7000 upfront of the consumer's funds and falsely promises to settle her credit card debts, then pockets the money as "upfront fees" without settling any debts. A.3333 would allow an out-of-state company to steal this cash from NJ consumers and keep it, free from worry about a Consumer Fraud Act suit.
A.3333 is unfair, misguided, and one-sided. A.3333 benefits only companies which defraud consumers. If A.3333 is enacted, New Jersey’s Consumer Fraud Act, currently ranked as the best in the nation, will sink to the worst.
CLNJ Opposes bills similar to A.695, would allow Rent to own stores to violate N.J.'s criminal usury law.
Assembly bill A695 (2008) was an industry bill intended to let rent to own stores break N.J.'s criminal usury law. The N.J. Supreme Court, in Perez v. Rent-a-Center (2006) decided that RTO stores must obey the 30% criminal usury law. A.695 says rent to own, alone of all stores selling goods on credit, can charge what amounts to 152% Annual percentage rate. CLNJ says the RTO stores, located mainly in urban areas, treat the poor as second class citizens, by charging them double what the middle class pays at the mall. The bill lets RTO stores first impose a whopping 175% markup for the "cash" price, then lets RTO double that for the credit price. So an item costing RTO $285 can be sold for $1000, which is 152% Annual Percentage Rate interest.
Read CLNJ's testimony opposing A.695.
Read AARP's testimony opposing A695.
Read what newspaper editorials said about similar bills in the past.
Bob Russo is New President of Consumers League of New Jersey
Congratulations to Bob Russo, who takes over as President of CLNJ in our 108th year. Bob is an expert on the Lemon Law, having been Lemon Law director for the New Jersey Division of Consumer Affairs. Bob also served as mayor of Montclair. He was consumer affairs director in Essex County as well. Best wishes to Bob on his new job.
Rent to own class action settled: Consumers to get refunds:
$ 109 Million to be Refunded to RTO customers
After the N.J. Supreme Court ruled that "rent to own" contracts at Rent-a-Center, which exceeded N.J.'s 30% criminal usury law would be illegal, the RAC company tried to appeal to the U.S. Supreme Court. That effort failed. RAC then settled the case. A Superior Court Judge approved the class action settlement on September 14, 2007. Consumers who had a rent-to-own contract with Rent-a-Center in New Jersey, during the period April 23, 1999 to March 16, 2006 are entitled to refunds. In general checks will be mailed directly to the RAC customers at their last known addresses. However, customers who have moved, or who are not contacted by mail, should go to this website:
for more information about how to claim your refunds. That website has a form for submitting questions as well.
Congratulations to the lawyers who litigated for many years to bring about this success for N.J. consumers: Mark Cuker, Esq., Seth Lesser, Esq. and William Riback, Esq.
Congratulations to the consumer groups who stood firm for the last twenty years in the state legislature, urging governement to protect consumers, not help fleece them: NJPIRG, CLNJ, Legal Services of New Jersey, the N.J. Public Advocate. On the national level: Consumer Federation of America, USPIRG, AARP, Consumers Union, and many others.
N.J. Supreme Court Rules Rent to Own
Contract is Illegal:
80% Interest Violated N.J.'s Criminal Usury Law
The New Jersey Supreme Court on March 15, 2006 ruled that the
rent to own contract of Rent-a-Center, as used in New Jersey
in the case of Hilda Perez, was a Retail Installment Sales contract,
and ruled that the maximum legal interest rate was the 30% limit
of New Jersey's Criminal Usury Law. Therefore the 80% interest
charged to Hilda Perez was illegal. You can read the full deciion
in PDF format by clicking here.
Hilda Perez is a cook from Camden who paid over $8,000 to Rent-a-Center
to purchase furniture and appliances. But the store wanted $18,000
for the items, which was an undiclosed 80% Annual Percentage
Rate. When the store tried to take all the goods back, Ms. Perez
sued Rent-a-Center. The N.J. Supreme Court decision means that
rent to own stores cannot continue to charge N.J.'s poorest citizens
interest rates of 80% or 100% or more. All stores must charge
30% or less.
For over twenty years Consumers League of New Jersey and NJPIRG
(and all consumer groups) have aargued that rent to own practices
are illegal in New Jersey. A similar decision, Grren v Continental
Rentals in 1994 held that charging more than 30% interest was
unconscionable amd illegal.
The N.J. Supreme Court decision levels the playing field. Now
RTO must obey the same rules that merchants like Sears have always
obeyed. CLNJ thinks that charging the urban poor 80% when the
middle class pay 21% at the mall, is a form of profiling and
discrimination. There are no rent to own stores in wealthy suburbs.
Our poor citizens want the same things which others enjoy. The
poor do not ask to be exploited. But poor RTO customers are never
told the Annual Percentage Rate. To conceal the interest rate
is inherently deceptive. The same $200 TV, which costs $240 on
credit at Sears, will cost them $1000 at rent to own, (that is
a 300% interest rate). No one wants to pay four times as much
as the middle class pays. Hats off to the N.J. Suprme Court for
having the courage protect the poor by enforcing the law. Now
CLNJ asks, will the Executive and Legislative branches enforce
that law? The purpose of government is to protect its citizens,
not help companies fleec them.
What's next? The RTO industry will try to get the Legislature
to legalize 150% interest for the urban poor, the same as what
the RTO lobbyists tried to do in 2005, see article below.
Tribute to Louis Novellino, October
Louis Novellino, a member of the Board of Directors of the Conumers
League of New Jersey, has died. Click
here to read our tribute to this consumer advocate.
Tribute to Professor Philip Shuchman
Please click here for a tribute
to Professor Philip Shuchman, a true consumer advocate and CLNJ
Board member, who died age 77.
Rent to Own Legislative Campaign
Consumers League Opposed
A.3851 (2005), Bill A.3851 Would Allow Rent to Own Stores to
charge interest at 152%- exceeding N.J.'s 30% Criminal Usury
Ceiling. Click here for statement N.J. Government ought to protect
poor urban consumers, not help stores fleece them.
Joint Letter of N.J. Consumer
Groups : NAACP, NJPIRG, Consumers League of New Jersey, Citizen
Action, Latino Leadership Alliance
of N.J., Lutheran Office of Government Ministry Opposing bill
Letter of New Jersey AARP Opposing
Groups oppose N.J. bill A.3851.
Consumer Federation of America, Consumers Union, USPIRG, ACORN,
Consumer Action, National Community Reinvestment Coalition.
What do N.J. Newspapers
think about bills to legalize high interest for rent to own stores?
Click here to read
ten years of editorials opposing rent to own.
What did Asm. Wilfredo Caraballo say about rent to own when he
was N.J. Public Advocate? Click
here to read how the Public Advocate condemned rent to own as
The Consumers League filed an amicus brief in Perez v. Rent-a-Center,
which decided that rent to own stores must obey N.J.'s criminal
usury law. Read CLNJ's
amicus brief in the New Jersey Supreme Court to learn the legal
issues. In 1981 the Legislature made 30% the ceiling
for all consumer credit in New Jersey.
The math of rent to own explained
in two easy charts: What is the Annual Percentage Rate? Bill
A.3851 would allows interest at 152% APR for rent to own stores.
RENT TO OWN RAP NOW AVAILABLE ON INTERNET AS FREE MP3 FILE! This is
a public service announcement in rap format.
Bankruptcy "Reform" Act ("BARF")
How did New Jersey's Senators
and Representative Vote on Bankruptcy "Reform?"
U.S House roll call votes,
Consumers League Opposed U.S. bill
S.256, Bankruptcy "Reform" Act Hurts N.J. Consumers
Click on these two links to learn why the bankruptcy "reform"
is bad for New Jersey. Use the [Back] button to return here.
February 2005 Harvard
Study: Half of bankruptcies are caused by medical bills, inadequate
"Lies in Lending Act" -- Rent
to Own bill HR 1701
When Rent to Own didn't get N.J Legislation, it turned to Congress
Rent to own: The ultimate scam:
Shame on theU.S. House of Representatives, which voted 215 -201
in favor of H.R. 1701. This bill may legalize unlimited interest
for Rent to Own stores, and PROHIBIT disclosure of the Annual
Percentage Rate! We call it the "Lies in Lending Act."
The House sided with the scam, instead of protecting the people.
CLNJ Position Paper on Rent to Own Bills in Congress: Oppose
HR1701, Support HR2498
CLNJ salutes the twelve Representatives from New Jersey --
all N.J. members of the House who voted, voted against H.R. 1701.
How did your representative vote? Click
here for the Roll Call votes of all members on H.R. 1701.
Shame on those who voted to make the House a partner in the rent
to own scam! The government ought to protect the people, not
help fleece them. Under H.R. 1701, the states and the Federal
Reserve Board can't even tell the victims how bad the interest
rate is. CLNJ calls interest rates of 100% to 300% scandalous.
Consumers League of NJ Newletters.
Arbitration: Did you "agree"
to give up your day in Court forever?
CLNJ History: Congress put some ideas from CLNJ testimony into
the US Home Equity Loan Consumer Protection Act, to prohibit
"rate rise surprise." Congress also adopted a CLNJ
plea to help save homes from foreclosure, by giving homeowners
a chance to pay their mortgages though bankruptcy payment
plans. More CLNJ History
Consumers League helps low income consumers with our rent
to own campaign. Rent to own is a way to buy a $200 television
for $1,000. CLNJ has the RENT TO OWN RAP, a 60 second public
service announcement for radio in rap form. CLNJ distributes
a pamphlet: With Rent to Own Your Paycheck's Blown, and
a poster for civic groups.
Consumers League has submitted briefs as friend of the Court
in consumer litigation.
Our opinions have been quoted in the media, from the Bergen Record
to the Wall Street Journal.
But Consumers League can't do it alone- we need your help, that's
why we ask that you Join CLNJ!
Consumers League of New Jersey is nonpartisan: CLNJ makes no
endorsements and contributes no money to candidates. CLNJ
gives you our honest opinions, and tries to persuade our elected
officials to do what's right for consumers.
Rent to own:
Class Action Settled
Supreme Court decision
Rent to Own RAP
Other amicus briefs