If you live in Iowa, several laws protect you from abusive or overreaching debt collection tactics. One of those laws, the Iowa Debt Collection Practices Act (Iowa DCPA), applies to creditors, debt collectors, and debt collection agencies and prohibits deceptive and abusive behavior. The other, the Iowa Consumer Credit Code, also prohibits creditors from engaging in abusive collection practices. These laws offer protections in addition to the federal Fair Debt Collection Practices Act (FDCPA).
This article explains the specific debt collection protections for people who live in Iowa and what you can do if a debt collector violates the law.
The Federal Fair Debt Collection Practices Act
The FDCPA protects consumers who owe money to merchants, credit card companies, or others for household debts. It prevents debt collection agencies from using intrusive or deceptive practices when collecting debts. (To learn more about the FDCPA, visit our Illegal Debt Collection Practices topic area.)
Keep in mind, however, that the FDCPA does not erase the debt, nor does it restrict the creditor’s options for taking legal action.
Iowa’s Debt Collection Practices Act
Iowa has also enacted laws that protect consumers from abusive and deceptive debt collection tactics. Similar to the federal FDCPA statute, the Iowa Debt Collection Practices Act applies to creditors, debt collectors, and collection agencies.
Which Debts and Collectors are Covered by the Iowa Debt Collection Practices Act?
The Iowa DCPA generally covers only the collection of consumer debt. Business or commercial debts are not covered by the Iowa DCPA. The debts do not need to be reduced to a legal judgment to be covered by the Iowa DCPA.
The Iowa DCPA applies to the original creditor as well as collection agencies and debt collectors.
Consumer Protections Against Debt Collectors Under the Iowa FDCPA
The Iowa DCPA protects consumers in many ways. The DCPA:
- regulates how a debt collector/collection agency/creditor can gain information to determine the location of the consumer
- regulates the time, place, and manner in which the debt collector or collection agency may communicate with the debtor, and
- restricts the ways that the debt collector can discuss information about the debt or the debtor.
Prohibited Debt Collection Activities Under the Iowa DCPA
The Iowa DCPA also works to prohibit and regulate overreaching debt collection practices. A debt collector cannot:
Make illegal threats, coerce or attempt to coerce in collecting the debt. This includes:
- using or threatening to use violence to harm a person, his reputation, or property
- making false representations about the amount or status of the debt, or
- falsely threatening that nonpayment of the debt will result in a criminal arrest or seizure, garnishment, attachment, or sale of the property or wages of the debtor.
Harass, oppress, or abuse the consumer in collecting the debt. Examples of harassing, oppressive, or abusive conduct include:
- using obscene or profane language
- causing the debtor to incur long distance telephone tolls or telegram fees by misrepresenting the true purpose for the debt collection communication
- continuously calling the consumer with the intent to annoy, abuse or harass the person, and
- failing to disclose the identity as a debt collector.
Overshare information about the debt or debtor. This includes:
- communicating or threatening to imply the fact of the debt to an unrelated person
- communicating about the debt beyond requesting information about the debtor’s location
- communicating with the debtor’s employer that the debt is in default
- publishing “deadbeat lists” of indebted persons, and
- communicating to the debtor in a way that display or conveys information about the debt other than the name, address and phone number of the debt collector.
Make false, deceptive or misleading representations. This includes:
- disguising the true name of the debt collector’s business, company or name of the business that the debt collector represents
- 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 debtor in an attempt to discover information about the debtor
- implying that the debt collector or collection agency is affiliated with the state or United States government
- simulating legal process in communications with the debtor, and
- falsely implying that the debt may be increased by attorney fees or other fees even though the fees are not legally permissible.
Engage in unfair practices. The Iowa DCPA also prohibits the debt collector from using unfair or unconscionable means to collect or attempt to collect a debt. Examples of unfair practices include (but are not limited to):
- collecting additional amounts beyond what is expressly authorized by the credit agreement
- communicating with the debtor when the debtor is represented by an attorney
- seeking a written statement or affirmation of debts discharged in bankruptcy without full disclosure that the debtor is not legally obligated to make the affirmation
- seeking a written statement or affirmation of a debt as 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 there is a case pending to determine worker’s compensation benefits.
Legal Remedies for Violating the Iowa Debt Collection Practices Act
If you feel that a debt collector or collection agency has violated the Iowa DCPA, you have several options:
File a complaint with the Iowa Attorney General’s office. The Iowa Attorney General's Office is empowered to investigate complaints and may take disciplinary or legal action for violations of the Iowa DCPA.
There may even be criminal liability for a debt collector who violates the Iowa Debt Collection Practices Act. A willful and knowing violation of the Iowa DCPA may be classified as a serious misdemeanor.
Bring a civil lawsuit. You can sue the creditor, debt collector, or collection agency that intentionally violated the Iowa DCPA. If you win, you can get
- actual damages, and
- additional damages (but these cannot be more than $1,000).
You cannot be awarded double damages by proving a violation of both the federal FDCPA and the Iowa DCPA.
Laws Regulating Collection by Creditors
Iowa also limits creditors from overreaching debt collection practices under the Iowa Consumer Credit Code. The Iowa Consumer Credit Code prohibits extortionate and unconscionable debt collection practices by creditors. Credit transactions exceeding $25,000 are exempt from the Iowa Consumer Credit Code.
What Is Extortionate and Unconscionable Conduct?
A creditor may engage in extortionate conduct if, when it agrees to give you credit, it threatens to use violence or harm against you, your reputation, or your property if you get behind in payments.
Unconscionable conduct under the Iowa Consumer Credit Code overlaps with the prohibited debt collection practices under the Iowa DCPA. The Iowa Consumer Credit Code specifically refers to the Iowa DCPA for the factors to be considered in determining whether the creditor has engaged in unconscionable debt collection practices.
The Iowa Consumer Credit Code also protects consumers by prohibiting unconscionable conduct at the time the credit was first issued.
Specific factors that might mean a credit agreement is unconscionable include:
- creditor knew that there was no reasonable probability of repayment in full by the debtor
- creditor knew that the consumer would be unable to receive substantial benefits from the property or services
- gross disparity between the price paid and the price at which the property or services could be obtained by similarly situated customers, and
- taking advantage of a debtor’s inability to understand the language of the agreement.
Legal Remedies When a Creditor Violates the Law
If you feel that the creditor has violated the Iowa Consumer Credit Code by engaging in unconscionable or extortionate debt collection practices, you have several remedies available.
File a complaint with the Iowa Attorney General’s office. The attorney general’s office is empowered to bring a civil action against the creditor to stop the creditor’s unconscionable and extortionate debt collection practices.
Bring a civil lawsuit. If the court finds unconscionable or extortionate conduct, you may be awarded actual damages as well as attorney fees. In addition, if the court finds that the creditor engaged in unconscionable or extortionate conduct, the court can legally stop the prohibited conduct as well as refuse to enforce the credit agreement against you.
However, if the court finds that you filed a lawsuit that you knew was groundless, the court may award attorney fees to the creditor.
While you can bring a lawsuit based upon violations of both the Iowa DCPA and the Iowa Consumer Credit Code, you cannot be awarded a double recovery of actual damages.
Getting More Information
The full text of the Iowa Debt Collection Practices Act is located at Iowa Code §§ 537.7101 to 537.7103. The provisions of the Iowa Consumer Credit Code discussed in this article can be found at Iowa Code §537.5107- §537.5108. (To learn how to find state statutes, visit Nolo’s Legal Research Center.)