In this article, we discuss Iowa consumer rights, how these rights affect Iowa consumer fraud, and answer the following questions:
- What constitutes consumer fraud in Iowa?
- Can an Iowa consumer sue a company for fraudulent activity?
- What damages can be awarded in an Iowa consumer fraud case?
- What exclusions exist under the Iowa Consumer’s Rights Act?
- Who oversees consumer rights issues in Iowa?
Iowa was the last state to allow its consumers to take private legal action against fraudulent business practices. The enacting of the Iowa Consumer Rights Act in 2007 finally allowed Iowa citizens to sue individuals or companies for consumer fraud..
What Constitutes Consumer Fraud In Iowa?
In order to maintain a cause of action for consumer fraud, four elements must be true:
- A deceptive action or practice had to occur by the defendant;
- The defendant must have intended that the plaintiff make a decision based on the act;
- The deception occurred during the normal course of trade or commerce; and
- The plaintiff can prove actual damages as a direct result of the defendant’s conduct.
Can An Iowa Consumer Sue A Company For Fraudulent Activity?
Yes. The Iowa Consumer Rights Act allows an individual to bring a civil suit against another individual or company for an alleged fraudulent act. This includes any practice that an individual or company engages in that they should know, or reasonably know, is unfair, deceptive, fraudulent, misrepresentative, concealing, etc, and that the company intends that the consumer rely upon and make decisions based upon said deception.
The burden of proof falls on the plaintiff to prove the above four elements are true. The claimant must prove that the fraudulent act was not an innocent by-product of the transaction between consumer and business; there must be material fact(s) backing up the claim.
What Damages Can Be Awarded In An Iowa Consumer Fraud Case?
The plaintiff’s recovery of damages is based on and proven by a preponderance of evidence. This harkens back to the previous point that the plaintiff must be able to prove he or she suffered actual damages as a result of the defendant’s deceptive practices; for if there was no suffering or loss, then what could be awarded? Damages can include, but are not limited to:
- Equitable relief
- Attorney’s fees
- Court costs
- Statutory damages up to 3x the amount of actual damages
The last item only comes into play only if it is found that the defendant acted with willful negligence and wanton disregard for the consumer’s rights and safety.
The statute of limitations on this type of claim under the Iowa Consumer Rights Act is two years from the discovery of the cause of action, or more if it was hidden form the consumer and not reasonably ascertainable.
What Exclusions Exist Under The Iowa Consumer Rights Act?
While the law covers a majority of individuals and institutions that may commit this type of fraud and deception, there are a number of notable exclusions, including:
- Attorney’s licensed to practice law in Iowa;
- Merchandise offered by insurance companies subject to Title XII;
- Financial institutions, including banks;
- Savings and loans associations;
- Credit unions under state or federal law;
- And any affiliates of the above;
- Retailers whose advertisements were prepared by a third party;
- Newspapers, magazines and certain other publications; and
- Volunteers for fraudulent charity work who are ignorant to the fraud and unpaid
Who Oversees Consumer Rights Issues In Iowa?
The Attorney General of Iowa oversees issues related to the Iowa Consumer Rights Act. Any party taking a legal action associated with the Iowa Consumer Rights Act must notify the Iowa Attorney General’s office within 7 days.
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