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Ayad v. Fleet Bank

2005 WL 3991111 (N.J. Super. App. Div. 2006) (Unpublished)

CONSUMER FRAUD; BANKS — Continuing to retain its customer’s money after a bank’s own investigation fails to produce evidence of prior payment of certificate of deposit constitutes an affirmative act that might rise to the level of an unconscienable commercial practice and therefore be a violation of the Consumer Fraud Act.

A bank customer held two certificates of deposit. Upon presentation of the certificates for payment, the bank told the customer that the bank could not locate any record of the accounts; nor could the bank find any record of any previous payment on those accounts. Despite the customer’s repeated demands for payment, the bank refused to pay on those certificates. The customer sued, seeking payment on the certificates and alleging an unconscionable commercial practice under the Consumer Fraud Act (CFA). The customer won partial summary judgment on the first count and the bank paid on the certificates. The bank won its summary judgment motion on the CFA claim, and the customer appealed.

The CFA created a rebuttable presumption that the customer was entitled to payment upon presentation of the certificates and its sworn statement that the owner of the certificates never received payment on the account nor transferred ownership of the account. Because the bank never contested the customer’s failure to present a sworn statement upon presentation of the certificates, the customer met its prima facie case of entitlement to payment. The bank never presented evidence to rebut the presumption that the account existed or that the bank was holding the account for the benefit of the account owner. Therefore, the customer was entitled to payment. The CFA makes unlawful unconscionable commercial practices. Continuing to retain the customer’s money after the bank’s own investigation failed to produce evidence of prior payment constituted an affirmative act. Affirmative acts do not require proof of intent to establish an unconscionable commercial practice. Also, a defendant cannot defeat a CFA claim by asserting a lack of ascertainable loss if the loss was not remedied prior to the filing of the law suit.

The matter was remanded for a trial to resolve the factual question of whether the bank’s affirmative act of withholding payment on its customer’s claim rose to the level of an unconscionable commercial practice.


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