The Basics Of Iowa’s Private Consumer Fraud Statute

For the past few years Iowans have been able to act as “private attorneys general” under Iowa’s Consumer Fraud Act, Iowa Code Chapter 714H.  That statute applies to consumers who lose money or property due to deception, misrepresentation, or other unfair selling or advertising practices, and allows them to seek damages and attorney fees if they win.  These claims can be brought for legal issues as varied as business practices or contract law claims, construction defects, personal injury or wrongful death, or products liability.  So what exactly is a private consumer fraud claim?

A person cannot engage in a practice or act that the person knows, or reasonably should know, is an unfair practice, deception, fraud, false pretense, or false promise, or a misrepresentation, concealment, suppression, or omission of a material fact, with the intent that others rely upon the unfair practice.  A claimant alleging an unfair practice must prove that the prohibited practice related to a material fact or facts; the deception cannot merely be incidental to the consumer transaction.  A consumer who suffers an ascertainable loss of money or property as the result of a prohibited practice or act in violation of this chapter may bring a private civil suit to recover actual damages and, in some cases, treble damages and attorney fees.

Actual damages may include, but are not limited to, out-of-pocket expenses caused by the prohibited act, equitable relief, reasonable attorney fees and court costs.  In addition to an award of actual damages, statutory damages up to three times the amount of actual damages may be awarded if the finder of facts finds clear and convincing evidence of willful and/or wanton disregard for the rights or safety of others pursuant to this chapter.

A suit brought under this law must be filed within two years of the occurrence giving rise to the cause of action, or within two years or longer only if it was not reasonable to discover a violation under this chapter in two years.