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Senate File 2239 - IntroducedA Bill ForAn Act 1relating to telemarketing consumer frauds and modifying
2civil penalties.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 714.16, subsection 7, Code 2024, is
2amended to read as follows:
37. a. A civil action pursuant to this section shall be by
4equitable proceedings. If it appears to the attorney general
5that a person has engaged in, is engaging in, or is about to
6engage in a practice declared to be unlawful by this section,
7the attorney general may seek and obtain in an action in a
8district court a temporary restraining order, preliminary
9injunction, or permanent injunction prohibiting the person from
10continuing the practice or engaging in the practice or doing an
11act in furtherance of the practice. The court may make orders
12or judgments as necessary to prevent the use or employment by
13a person of any prohibited practices, or which are necessary
14to restore to any person in interest any moneys or property,
15real or personal, which have been acquired by means of a
16practice declared to be unlawful by this section, including the
17appointment of a receiver in cases of substantial and willful
18violation of this section. If a person has acquired moneys or
19property by any means declared to be unlawful by this section
20and if the cost of administering reimbursement outweighs the
21benefit to consumers or consumers entitled to the reimbursement
22cannot be located through reasonable efforts, the court may
23order disgorgement of moneys or property acquired by the person
24by awarding the moneys or property to the state to be used by
25the attorney general for the administration and implementation
26of this section. Except in an action for the concealment,
27suppression, or omission of a material fact with intent that
28others rely upon it, it is not necessary in an action for
29reimbursement or an injunction, to allege or to prove reliance,
30damages, intent to deceive, or that the person who engaged
31in an unlawful act had knowledge of the falsity of the claim
32or ignorance of the truth. A claim for reimbursement may be
33proved by any competent evidence, including evidence that would
34be appropriate in a class action.
35b. In addition to the remedies otherwise provided for in
-1-1this subsection, the attorney general may request and the
2court may impose a civil penalty not to exceed forty thousand
3dollars per violation against a person found by the court to
4have engaged in a method, act, or practice declared unlawful
5under this section; provided, however, a course of conduct
6shall not be considered to be separate and different violations
7merely because the conduct is repeated to more than one person.
8Notwithstanding the forty thousand dollar civil penalty, if
9the unfair practice, deception, fraud, false pretense, false
10promise, or misrepresentation in violation of subsection 2,
11paragraph “a”, was made over the telephone, the civil penalty
12shall not exceed eighty thousand dollars per violation. In
13addition, on the motion of the attorney general or its own
14motion, the court may impose a civil penalty of not more than
15five thousand dollars for each day of intentional violation
16of a temporary restraining order, preliminary injunction, or
17permanent injunction issued under authority of this section.
18A penalty imposed pursuant to this subsection is in addition
19to any penalty imposed pursuant to section 537.6113. Civil
20penalties ordered pursuant to this subsection shall be paid to
21the treasurer of state to be deposited in the general fund of
22the state.
23EXPLANATION
24The inclusion of this explanation does not constitute agreement with
25the explanation’s substance by the members of the general assembly.
26This bill relates to telemarketing consumer fraud and
27modifies civil penalties.
28Under current law, it is a consumer fraud for a person to
29act, use, or employ an unfair practice, deception, fraud, false
30pretense, false promise, and misrepresentation or concealment,
31suppression, and omission of a material fact with the intent
32for another person to rely on the act or omission in connection
33with a sale, lease, or advertisement of merchandise or in
34the solicitation of contributions for a charitable purpose
35regardless of whether the person had been misled, deceived, or
-2-1damaged. A person who does so is subject to a civil penalty no
2greater than $40,000 per violation. Under the bill, a person
3who does so over the telephone is subject to an $80,000 civil
4penalty per violation.
-3-cm/jh
2civil penalties.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 714.16, subsection 7, Code 2024, is
2amended to read as follows:
37. a. A civil action pursuant to this section shall be by
4equitable proceedings. If it appears to the attorney general
5that a person has engaged in, is engaging in, or is about to
6engage in a practice declared to be unlawful by this section,
7the attorney general may seek and obtain in an action in a
8district court a temporary restraining order, preliminary
9injunction, or permanent injunction prohibiting the person from
10continuing the practice or engaging in the practice or doing an
11act in furtherance of the practice. The court may make orders
12or judgments as necessary to prevent the use or employment by
13a person of any prohibited practices, or which are necessary
14to restore to any person in interest any moneys or property,
15real or personal, which have been acquired by means of a
16practice declared to be unlawful by this section, including the
17appointment of a receiver in cases of substantial and willful
18violation of this section. If a person has acquired moneys or
19property by any means declared to be unlawful by this section
20and if the cost of administering reimbursement outweighs the
21benefit to consumers or consumers entitled to the reimbursement
22cannot be located through reasonable efforts, the court may
23order disgorgement of moneys or property acquired by the person
24by awarding the moneys or property to the state to be used by
25the attorney general for the administration and implementation
26of this section. Except in an action for the concealment,
27suppression, or omission of a material fact with intent that
28others rely upon it, it is not necessary in an action for
29reimbursement or an injunction, to allege or to prove reliance,
30damages, intent to deceive, or that the person who engaged
31in an unlawful act had knowledge of the falsity of the claim
32or ignorance of the truth. A claim for reimbursement may be
33proved by any competent evidence, including evidence that would
34be appropriate in a class action.
35b. In addition to the remedies otherwise provided for in
-1-1this subsection, the attorney general may request and the
2court may impose a civil penalty not to exceed forty thousand
3dollars per violation against a person found by the court to
4have engaged in a method, act, or practice declared unlawful
5under this section; provided, however, a course of conduct
6shall not be considered to be separate and different violations
7merely because the conduct is repeated to more than one person.
8Notwithstanding the forty thousand dollar civil penalty, if
9the unfair practice, deception, fraud, false pretense, false
10promise, or misrepresentation in violation of subsection 2,
11paragraph “a”, was made over the telephone, the civil penalty
12shall not exceed eighty thousand dollars per violation. In
13addition, on the motion of the attorney general or its own
14motion, the court may impose a civil penalty of not more than
15five thousand dollars for each day of intentional violation
16of a temporary restraining order, preliminary injunction, or
17permanent injunction issued under authority of this section.
18A penalty imposed pursuant to this subsection is in addition
19to any penalty imposed pursuant to section 537.6113. Civil
20penalties ordered pursuant to this subsection shall be paid to
21the treasurer of state to be deposited in the general fund of
22the state.
23EXPLANATION
24The inclusion of this explanation does not constitute agreement with
25the explanation’s substance by the members of the general assembly.
26This bill relates to telemarketing consumer fraud and
27modifies civil penalties.
28Under current law, it is a consumer fraud for a person to
29act, use, or employ an unfair practice, deception, fraud, false
30pretense, false promise, and misrepresentation or concealment,
31suppression, and omission of a material fact with the intent
32for another person to rely on the act or omission in connection
33with a sale, lease, or advertisement of merchandise or in
34the solicitation of contributions for a charitable purpose
35regardless of whether the person had been misled, deceived, or
-2-1damaged. A person who does so is subject to a civil penalty no
2greater than $40,000 per violation. Under the bill, a person
3who does so over the telephone is subject to an $80,000 civil
4penalty per violation.
-3-cm/jh