A New Jersey Appeals Court has affirmed the dismissal of case against a debt buyer accused of attempting to collect without having a proper license to do so, ruling the plaintiff lacked standing to pursue her claims.
The background: Back in 2015, the defendant purchased a defaulted credit‑card account, filed a lawsuit to recover the balance, and obtained a default judgment. Six years later, the plaintiff convinced the trial court to vacate that default judgment. Two weeks before the default judgment was vacated, the plaintiff filed this class action. She alleged the defendant had violated New Jersey’s Consumer Finance Licensing Act by acquiring and seeking to collect on the debt without a New Jersey license, as well as violating the state’s Consumer Fraud Act.
- A state court judge granted the defendant’s motion to dismiss, which the plaintiff appealed.
The ruling: Echoing rulings from cases dating back to 2013, the Appeals Court said debt‑collection activities by a third‑party purchaser are not “in connection with the sale of merchandise” and therefore fall outside the CFA’s scope.
- The panel found “nothing in the legislative history … supports [the] argument that the Legislature intended to confer a private right of action” under the CFLA, citing the statute’s explicit grant of enforcement authority solely to the Department of Banking and Insurance.
- Because the CFLA offers no private remedy, the court held the plaintiff could not use the Uniform Declaratory Judgment Act “to circumvent the lack of a private right of action.” Without an underlying substantive claim, she lacked the “real adverseness” required for standing.
