Skip to content

Murphy signs laws to protect NJ consumers from financial predators

New Jersey consumers will see greater protection from predatory financial practices in the tax preparation and service industries under a package of bills signed into law on Friday by Gov. Phil Murphy.

The new laws, all sponsored by Democrats, include requirements for tax preparers and service contract providers, while also strengthening New Jersey’s antitrust laws and extending protection to indirect purchasers like municipalities or the state government.

“New Jersey consumers are the heartbeat of our state’s economy and it is imperative that we protect them from those who are looking to target their finances,” Murphy said in a statement. “These bills will set new standards for financial service providers to abide by, giving our consumers the protection they need from certain deceptive actors.

Under one of the bills (S891), tax preparers in New Jersey will be prohibited from requiring consumers to enter into refund anticipation check agreements in order to complete a tax return.

It typically takes three to six weeks to get a refund from the IRS after filing. Refund anticipation checks and loans allow taxpayers to get their money sooner through an agreement with a tax preparer, but those agreements often come with surprise fees that are deducted from the taxpayers refund.

The new law requires tax preparers to disclose any service charges and fees associated with refund anticipation checks and prohibits tax preparation services from advertising those agreements as free if the service results in higher or additional fees.

State Sen. Nellie Pou, D-Passaic, one of the bill’s main sponsors, said it places the responsibility on tax preparers to fully explain refund anticipation services and prohibits them from requiring those agreements.

“Tax filing season represents a chance for relief for Americans who may face difficulty balancing their household budgets,” Pou said in a statement. “Although these refunds provide a boost at just the right time for many families, the filing process can be difficult to navigate, and low-income families in need of assistance can find themselves exposed to consumer protection risks when working with tax preparation services.”

The new law, along with a second measure (S902) that imposes consumer protection requirements on service contract providers, are particularly important for socially vulnerable communities, “including individuals with low and moderate income and limited English proficiency and people of color, who are often targeted by bad actors in the financial and services sectors,” officials said.

A third piece of legislation signed on Friday (S901) also makes it easier for New Jersey’s Division of Consumer Affairs and the state attorney general to take action against companies that violate consumer protection laws.

The new law requires parties in private consumer fraud lawsuits to notify the office of the attorney general within 24 hours of filing, and it amends the New Jersey Antitrust Act to allow indirect purchasers like municipalities and the state to collect damages for antitrust violations.

New Jersey Acting Attorney General Matthew Platkin said the package of laws highlights the Murphy administration’s “commitment to stand up for our state’s residents, especially those most vulnerable to deceptive business practices.”

“These laws provide us with more legal tools to hold accountable those who seek to take advantage of consumers in our state,” Platkin said in a statement. “And make no mistake, we will hold you accountable under the law.”

Our journalism needs your support. Please subscribe today to NJ.com.

Derek Hall may be reached at [email protected]. Follow him on Twitter @dereknhall.

Leave a Reply

Your email address will not be published.

BPISSUENEWS