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For immediate release Wednesday, July 1, 2009.
Contact Bob Brammer 515-281-6699 or rbrammer@ag.state.ia.us.

Consumer “Private Right of Action”:
What Consumers Need to Know

“This is a very important tool for Iowans if they are cheated by consumer fraud or deception,” said Attorney General Tom Miller.

Des Moines. Attorney General Tom Miller hailed the new “Private Right of Action” law taking effect July 1 and urged consumers to know and use the rights given them by the new law.

“This is a very important tool for Iowans if they are cheated by consumer fraud or deception,” Miller said.

“Iowa finally has joined the rest of the nation,” he said, as he marked the advent of a law he and others have advocated for years. Iowa “stuck out like a sore thumb for years” in being the only state not to give its people a private right of action to sue under the state’s Consumer Fraud Act, Miller said.

“The new law makes it much more possible for consumers to get damages and attorney fees if they prevail in a consumer fraud lawsuit,” he said. “In the past, even if they were cheated badly and went to court and won, consumers couldn’t obtain attorney fees to pay for the cost of the action.”

Miller urged Iowans to go to www.IowaAttorneyGeneral.gov for information on the law.

The Attorney General was joined in a news conference at the Iowa State Capitol by organizations that fought for the legislation this year and in years past. Anthony Carroll, AARP Iowa Associate State Director for Advocacy, and Chris Coleman, President of the Better Business Bureau of Greater Iowa, delivered remarks along with Miller. Carroll said AARP was “shifting from advocacy to education” so Iowans know about their rights under the law.

[Left to right: Attorney General Tom Miller, Anthony Carroll of AARP Iowa, Chris Coleman of BBB of Greater Iowa.]

“The Private Right of Action law is especially important for older Iowans, who often are victims of misrepresentation and deception,” Miller said.

“This law gives consumers a fighting chance if they are victims in situations involving home improvements, auto sales and repairs, door-to-door sales, and many other transactions.”

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.”

What consumers need to know about the Private Right of Action:

The Attorney General’s Office has posted a Consumer Advisory Bulletin at www.IowaAttorneyGeneral.gov 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 material 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, or www.iid.state.ia.us.)

  • Most consumers should start by trying to resolve their complaints directly with the company. And consumers still may wish to file written consumer complaints with the Attorney General’s Consumer Protection Division. Many companies may choose to resolve complaints informally, short of being sued.

  • For more information, or to file a consumer complaint, consumers should go to www.IowaAttorneyGeneral.gov. Or, consumers may write to the AG’s General's Consumer Protection Division., Hoover Building, Des Moines, Iowa 50319. Or, they may call 515-281-5926, or 888-777-4590 toll-free.

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