Iowa is joining the rest of the nation in giving individual citizens the right to sue in consumer fraud cases. The new law took effect yesterday, July 1st, and Iowa Attorney General Tom Miller says it replaces a law that originated in the Middle Ages.
"Consumers had to use what’s called ‘common law fraud’ and it was very arcane, very outdated and very one-sided against the comsumer," Miller says. "It made the consumer prove a lot of different things, including reliance and intent, and it was cumbersome."
He says the new "private right of action" law now in effect will make it more likely citizens can recoupe their losses, as before a consumer had to pay their attorney fees.
Now, if a consumer wins their case, the individual or business that committed the fraud pays those attorney fees. "Usually these cases don’t involve a lot of money, so it doesn’t make a lot of sense to sue for $500 or $1,000 or even $1,500 if it’s going to cost $5,000, $10,000 in attorneys’ fees," Miller says.
According to Miller, the new law is especially important for older Iowans because they are often the victims of consumer fraud. The A.A.R.P. was among the groups lobbying for the new law.