Iowans Now Have Private Right to Act Against Consumer Fraud

With enactment of the Private Right of Action law on July 1, 2009, Iowans finally join the rest of the nation in having the important right to be able to go to court to protect their rights as consumers.

“Until passage of this law this year, Iowans who were consumer fraud victims had little to no hope of ever recovering their losses,” said Anthony Carroll, AARP Iowa Associate State Director for Advocacy. “AARP members and volunteers worked hard this year to change that, and we are grateful that from now on, Iowans will have this basic protection and a road to recovery against consumer fraud.”

Carroll said enactment of the Private Right of Action law was especially critical for older Iowans, who often are victims of misrepresentation and deception, particularly in this tough economy.

AARP, with more than 400,000 members in Iowa at 50 and over, fought hard for passage of this new law to give protection in situations involving door-to-door sales, used cars, home improvements, home mortgages and many other transactions.

At a news conference with Attorney General Tom Miller at the Iowa State Capitol, Miller said the new law gives Iowans a fighting chance to recover their losses if they are victims of consumer fraud.

“Under the old law,” Miller said, “consumers theoretically could bring a common-law action for fraud, but it was hardly a realistic option. They had to prove reliance and intent, not just deception or misrepresentation, for example. And they could not obtain attorney fees even if they won. Those were enormous hurdles that most consumers couldn’t get over,” he said.

“The Private Right of Action law fosters fundamental fairness,” Miller said. “It gives a fair shake to consumers, and to the vast majority of honest businesses who play by the rules, tell the truth and treat consumers fairly.”

The Attorney General’s Office has posted a Consumer Advisory Bulletin on the Private Right of Action at www.IowaAttorneyGeneral.org listing some of the main points consumers should know about the Private Right of Action, including:

• Consumers can sue businesses that engage in deceptive practices, unfair practices, or misrepresentation, or that fail to disclose materials facts.
• The law covers areas with the most need for private remedies, including new and used car sales and service; home improvements, door-to-door sales; charitable solicitations; cell phone and satellite television sales and service; sweepstakes and telemarketing fraud; and many others. The law covers the sale, lease or advertisement of consumer merchandise, and solicitation of charitable contributions.
• Consumers will be able to sue to recover actual damages, but will not be able to recover claims for bodily injury or pain and suffering. Consumers will also be able to seek punitive damages of up to three times actual damages in cases of willful and wanton conduct by the defendant. If the consumer wins the lawsuit, the court must award reasonable attorney fees.

The law does not cover several types of businesses, including complaints about insurance agents or companies. (Consumers with insurance complaints should contact the Iowa Insurance Division: 877-955-1212.)

See more details or file a consumer complaint through the Iowa Attorney General, or call 515-281-5926 or 1-888-777-4590 toll-free.