In a case that was defended by Jacquelyn DiCicco of J. Robbin Law, a New Jersey Appeals Court has affirmed the dismissal of a consumer’s class-action lawsuit against a group of debt buyers, ruling that there is no private right of action under the New Jersey Consumer Finance Licensing Act, and that the plaintiff’s claims under the Consumer Fraud Act were not applicable in this debt collection context.
The background: The case originated when the plaintiff defaulted on a credit card debt. The debt was subsequently assigned to various entities, ultimately landing with the defendant debt buyer. In 2017, the defendant obtained a default judgment against the plaintiff.
- In January 2023, the plaintiff filed a class action complaint against the defendant and other debt buyers in the Law Division. The complaint alleged that the defendants had unlawfully purchased consumer debts without obtaining the required business license under the CFLA. The plaintiff sought declaratory relief, treble damages under the CFA, and disgorgement of alleged unjust enrichment.
- The case made its way to the appeals court after the Law Division dismissed the plaintiff’s complaint with prejudice and denied the plaintiff’s cross-motion to transfer, consolidate, and vacate the earlier default judgment.
The ruling: The Appeals Court upheld the trial court’s decision to dismiss the plaintiff’s case with prejudice. The court affirmed that the CFLA does not provide individuals with a private right of action, meaning the plaintiff could not sue for damages based on the licensing issue. Additionally, the court found that the plaintiff’s claim under the Consumer Fraud Act was unfounded, as there was no transaction involving the sale of goods or services that would trigger the CFA’s protections.
- Ultimately, the appeals court agreed with the lower court’s decision to deny the plaintiff’s cross-motion to transfer and consolidate the cases, ruling that the absence of a viable cause of action made the motion moot.
