Culver signs consumer private right of action law

DES MOINES - For the first time, Iowans will join other U.S. consumers who have a private right to bring a civil fraud lawsuit against individuals or businesses under the state's consumer protection law.

Gov. Chet Culver signed House File 712 on Tuesday establishing a private right of action effective July 1.

“This is a very important day for Iowa consumers,” said Iowa Attorney General Tom Miller, whose office has worked for years to address the fact that Iowa is the only state in the country whose law does not give citizens the right to take individual action when they have been victims of fraud.

“Iowans now finally join the citizens of every other state in having the important right to be able to go to court to protect their rights as consumers,” Miller said. “This bill gives protections to older Iowans, and to all consumers who might be cheated when they buy used cars, contract for home repairs, or get a home mortgage.”

The Iowa legislation includes exemptions for many regulated, trained professionals, but targets problem areas such as new and used car sales, car repair and home improvement businesses, telemarketers and sweepstakes, backer said.

Opponents contended existing Iowa law already provides redress for fraud victims, and that the current economic recession is no time to create potential unintended consequences or new costs for businesses already struggling with rising expenses and sales slumps.

Miller countered that the new law will benefit the vast majority of Iowa businesses, noting that enterprises which play by the rules should not face unfair competition from businesses that would use fraudulent practices.

Currently, the Attorney General's Office recovers more than $1 million annually for consumers through complaint handling, lawsuits and settlements. But an estimated 3,500 to 5,000 Iowans are victims of fraud each year that are left without any ability to recover their losses.