SF 2239 (LSB 5813XS (2) 90)

SENATE FILE 2239

BY  WAHLS

A BILL FOR

An Act relating to telemarketing consumer frauds and modifying civil penalties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

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