Senate File 2239 - Introduced SENATE FILE 2239 BY WAHLS A BILL FOR An Act relating to telemarketing consumer frauds and modifying 1 civil penalties. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5813XS (2) 90 cm/jh
S.F. 2239 Section 1. Section 714.16, subsection 7, Code 2024, is 1 amended to read as follows: 2 7. a. A civil action pursuant to this section shall be by 3 equitable proceedings. If it appears to the attorney general 4 that a person has engaged in, is engaging in, or is about to 5 engage in a practice declared to be unlawful by this section , 6 the attorney general may seek and obtain in an action in a 7 district court a temporary restraining order, preliminary 8 injunction, or permanent injunction prohibiting the person from 9 continuing the practice or engaging in the practice or doing an 10 act in furtherance of the practice. The court may make orders 11 or judgments as necessary to prevent the use or employment by 12 a person of any prohibited practices, or which are necessary 13 to restore to any person in interest any moneys or property, 14 real or personal, which have been acquired by means of a 15 practice declared to be unlawful by this section , including the 16 appointment of a receiver in cases of substantial and willful 17 violation of this section . If a person has acquired moneys or 18 property by any means declared to be unlawful by this section 19 and if the cost of administering reimbursement outweighs the 20 benefit to consumers or consumers entitled to the reimbursement 21 cannot be located through reasonable efforts, the court may 22 order disgorgement of moneys or property acquired by the person 23 by awarding the moneys or property to the state to be used by 24 the attorney general for the administration and implementation 25 of this section . Except in an action for the concealment, 26 suppression, or omission of a material fact with intent that 27 others rely upon it, it is not necessary in an action for 28 reimbursement or an injunction, to allege or to prove reliance, 29 damages, intent to deceive, or that the person who engaged 30 in an unlawful act had knowledge of the falsity of the claim 31 or ignorance of the truth. A claim for reimbursement may be 32 proved by any competent evidence, including evidence that would 33 be appropriate in a class action. 34 b. In addition to the remedies otherwise provided for in 35 -1- LSB 5813XS (2) 90 cm/jh 1/ 3
S.F. 2239 this subsection , the attorney general may request and the 1 court may impose a civil penalty not to exceed forty thousand 2 dollars per violation against a person found by the court to 3 have engaged in a method, act, or practice declared unlawful 4 under this section ; provided, however, a course of conduct 5 shall not be considered to be separate and different violations 6 merely because the conduct is repeated to more than one person. 7 Notwithstanding the forty thousand dollar civil penalty, if 8 the unfair practice, deception, fraud, false pretense, false 9 promise, or misrepresentation in violation of subsection 2, 10 paragraph “a” , was made over the telephone, the civil penalty 11 shall not exceed eighty thousand dollars per violation. In 12 addition, on the motion of the attorney general or its own 13 motion, the court may impose a civil penalty of not more than 14 five thousand dollars for each day of intentional violation 15 of a temporary restraining order, preliminary injunction, or 16 permanent injunction issued under authority of this section . 17 A penalty imposed pursuant to this subsection is in addition 18 to any penalty imposed pursuant to section 537.6113 . Civil 19 penalties ordered pursuant to this subsection shall be paid to 20 the treasurer of state to be deposited in the general fund of 21 the state. 22 EXPLANATION 23 The inclusion of this explanation does not constitute agreement with 24 the explanation’s substance by the members of the general assembly. 25 This bill relates to telemarketing consumer fraud and 26 modifies civil penalties. 27 Under current law, it is a consumer fraud for a person to 28 act, use, or employ an unfair practice, deception, fraud, false 29 pretense, false promise, and misrepresentation or concealment, 30 suppression, and omission of a material fact with the intent 31 for another person to rely on the act or omission in connection 32 with a sale, lease, or advertisement of merchandise or in 33 the solicitation of contributions for a charitable purpose 34 regardless of whether the person had been misled, deceived, or 35 -2- LSB 5813XS (2) 90 cm/jh 2/ 3
S.F. 2239 damaged. A person who does so is subject to a civil penalty no 1 greater than $40,000 per violation. Under the bill, a person 2 who does so over the telephone is subject to an $80,000 civil 3 penalty per violation. 4 -3- LSB 5813XS (2) 90 cm/jh 3/ 3