What You Need to Know

• Different statutes may have different requirements under which a claim may be brought – The New Jersey Consumer Finance Protection Act (“CFLA”) does not contain a private right of action. The New Jersey Consumer Fraud Act (“CFA”) only applies to misrepresentations made during offers to sell products or negotiations about modifying existing obligations.
• Unjust enrichment claims have 2 requirements – Such claims require that the claimant (1) expected some benefit in return after (2) providing and allowing an opposing party to retain a benefit.

Introduction

In a recent case from the United States Court of Appeals for the Third Circuit, the Court determined whether the District Court had correctly dismissed a complaint alleging violations of sections of the New Jersey Consumer Finance Protection Act, N.J.S.A. 17:11C-3 (”CFLA”) and the New Jersey Consumer Fraud Act, N.J.S.A.56:8-2 (“CFA”), along with an unjust enrichment claim. Browne v. Nat’l Collegiate Student Loan Trust, No. 24-1896 (3d Cir. 2025). In doing so, the Court clarified which facts are necessary to validly bring claims under these statutes. The Court ultimately affirmed dismissal of the complaint.

Background

Lesroy Browne made payments on his student loans to National Collegiate Student Loan Trust (the “Trust”). However, Browne claimed that the Trust failed to follow a state licensing rule and could not prove that it owned his loan. Thus, Browne contended that he was relieved of his obligations to make any payments on his student loans after 2017 and the payments he made from 2017 to 2020 were fraudulently obtained by the Trust. As such, Browne claimed that the Trust had violated the CFLA and CFA and it had been unjustly enriched. The District Court, however, dismissed Browne’s complaint for failure to state a claim. Browne appealed the decision.

Appeal

The Court adopted the District Court’s reasoning in its entirety. It found that while the CFLA requires individuals engaging in business as a consumer lender or sales finance company to obtain a license first, the CFLA does not allow for a private right of action relying on the New Jersey Appellate Division’s holding in Francavilla v. Absolute Resolutions VI, LLC, 478 N.J. Super. 171 (App. Div. 2024).

The Court then found that Browne could not claim that the Trust violated the CFA, as the Act only applies to misrepresentations made during offers to sell a product or during negotiations to modify existing obligations. While this may include a collection agency’s attempt to collect a debt, it does not include debt collection efforts alone. Since Browne’s claims centered around collection efforts on his loans but did not include any allegations of inducements to modify the loan, the Trust’s collection actions could not support a CFA violation.

Lastly, the Court found Browne’s unjust enrichment claim also failed. Unjust enrichment claims require that the plaintiff show that (1) it expected something in return from the defendant at the time that a benefit was conferred on the defendant, and (2) defendant’s failure to provide plaintiff with some benefit in return enriched the defendant beyond its contractual rights. However, Browne did not allege any expected benefits from the Trust during the collection efforts.

Takeaways

This case serves as a reminder of the fact that it is important to determine (1) whether it is even possible to bring a claim under a particular statute, and (2) whether the claim meets the requirements necessary to qualify under the statute. Without meeting such requirements, the Court will be likely to dismiss complaints for failure to make a claim.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Keshav Agiwal at kagiwal@riker.com.