Proving Civil Fraud In NY

NY Criminal Fraud

Fraud comes in different forms in New York, which recognizes both common law fraud and statutory fraudulent behavior.┬áIn business, as in life, people are not always as reputable and they appear. Unfortunately, there are less than scrupulous business actors who will resort to fraudulent misrepresentations to gain what you have – recourse does exist.

New York Civil Common Law Fraudulent Misrepresentation

  1. the defendant made an intentional material false representation;
  2. the plaintiff reasonably relied upon the defendant’s fraudulent misrepresentation; and
  3. the plaintiff suffered damage as a result of their reliance on the fraudulent misrepresentation.

The burden of proving the elements of fraudulent misrepresentations is by “clear and convincing evidence” which is a substantially greater burden of proof than the normal “preponderance of the evidence” standard. This standard, usually, means that a plaintiff needs to establish at trial by clear and convincing evidence that a defendant had actual knowledge of some material fact and then specifically misled the plaintiff with respect thereto.

New York Deceptive Practices Act

Additionally, New York’s Deceptive Practices Act (which is not to be confused with the Uniform Deceptive Trade Practices Act that does not apply in New York) includes NY General Business Law section 349, which prohibits deceptive business practices in the conduct of any business, trade, or commerce. This law is broadly construed and applies to a wide range economic activities and empowers consumers and gives them an even playing field in their disputes with businesses that are generally in a superior position.

According to the Court of Appeals of New York, the highest court in the state, NY GBL 349 has three elements: 1) the act or practice was consumer-oriented; 2) the act or practice was misleading in a material respect; and 3) the plaintiff was injured as a result of the deceptive act or practice. This is a much lower bar to meet when compared to common-law fraudulent misrepresentation because a plaintiff does not need to prove that the defendant intended to mislead the plaintiff.

New York’s Deceptive Practices Act also, specifically, prohibits false advertising and odometer tampering (which is classified as a misdemeanor). This statute allows for criminal prosecution by the attorney general, as well as civil litigation by the party injured by the deceptive practices. If the plaintiff prevails on a deceptive trade practices claim, s/he may be awarded actual damages up to $1,000 (in cases of willful or purposeful deception), as well as the costs and fees associated with the litigation.

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