In Iowa, several laws protect consumers. One law is the Iowa Debt Collection Practices Act, which applies to creditors, debt collectors, and collection agencies and prohibits them from engaging in deceptive and abusive collection tactics. The other one is the Iowa Consumer Credit Code, which prohibits creditors from engaging in abusive collection practices.
Under the Iowa Debt Collection Practices Act, a debt collector is prohibited from making illegal threats, coerce, or attempt to coerce in collecting a debt. For example, a debt collector cannot use or threaten to use violence to harm the consumer, his or her reputation, or his or her property, make false representations about the amount or status of the debt, or falsely threaten that nonpayment of debt will result in arrest, garnishment, attachment, or sale of property or wages.
In addition, a debt collector cannot harass, oppress, or abuse the consumer in collecting the debt. This includes using obscene or profane language, causing the consumer to incur long distance phone calls by misrepresenting the true purpose for the communication, continuously calling the consumer with the intent to annoy, abuse, or harass, and failing to disclose the debt collector’s identity.
Furthermore, the debt collector may not share information about the debt or the consumer. For example, the debt collector cannot communicate or threaten to reveal the debt to an unrelated person, communicate about the debt beyond requesting information about the consumer’s location, communicate with the consumer’s employer that the debt is in default, publishing lists of indebted persons, and communicate to the consumer in a way that displays or conveys information about the debt other than the consumer’s name, address, and phone number.
Moreover, the debt collector may not make false, deceptive, or misleading representations. This includes disguising the true identity of the debt collector, failing to disclose in the initial communication that the debt collector is attempting to collect a debt, representing that the debt collector has information or something of value for the consumer in an attempt to discover information about the consumer, implying that the debt collector is affiliated with the state or federal government, simulating legal process in communications with the consumer, and falsely implying that the debt may be increased by attorneys fees or other fees even though they are not legally permissible.
Finally, the debt collector is prohibited from engaging in unfair collection practices. For example, a debt collector may not collect additional amounts beyond what is expressly authorized by the credit agreement, communicate with the debtor when represented by an attorney, seek a written statement or affirmation of debts discharged in bankruptcy without full disclosure that the debtor is not legally obligated to make the affirmation, seek a written statement or affirmation of a debt being chargeable upon the property of either the husband or wife when the original obligation was not chargeable to both spouses, and collecting for health service provider treatments after receiving notice that a case is pending for a determination of worker’s compensation benefits.
In terms of legal remedies for violation of Iowa’s Debt Collection Practices Act, the consumer may file a complaint with the Iowa Attorney General’s Office, who can investigate complaints and take civil and/or criminal action. The consumer may also bring a civil lawsuit and obtain actual damages as well as additional damages not to exceed $1,000.
Under the Iowa Consumer Credit Code, a debt collector is prohibited from engaging in extortionate and unconscionable debt collection practices. Extortionate conduct includes threatening to use violence or harm against the consumer, the consumer’s reputation, or the consumer’s property if the consumer gets behind in payments. Unconscionable conduct includes conduct that is covered under Iowa’s Debt Collection Practices Act. The Iowa Consumer Credit Code further protects consumers by prohibiting unconscionable conduct at the time credit was first obtained. Factors that indicate that a credit agreement is unconscionable include the following: the creditor knew the consumer had no reasonable probability to repay the debt; the creditor knew the consumer would not receive substantial benefits from the property or services; a gross disparity exists between the purchase price and the price that could be obtained by similarly situated consumers; and the creditor took advantage of the consumer’s inability to understand the agreement’s language.
In terms of legal remedies, the consumer may file a complaint with the Iowa Attorney General’s Office, which can bring a civil lawsuit. The consumer may also file a civil suit for actual damages and attorneys fees and request that the court stop the prohibited conduct and refuse to enforce the credit agreement.