Iowa Consumer Protection Laws: Lemon Law, Refunds, Repairs and Scams

Iowa's lemon law covers self-propelled vehicles bought or leased in Iowa for highway use (not mopeds, motorcycles, autocycles, motor homes or vehicles over 15,000 pounds). The "lemon law rights period" is the manufacturer's warranty term, two years from delivery, or the first 24,000 miles, whichever ends first. A reasonable number of attempts is presumed if, during that period, the same defect substantially impairing the vehicle was examined or repaired at least three times plus a final repair attempt by the manufacturer, a defect likely to cause death or serious injury was examined or repaired at least once plus a final attempt, or the vehicle was out of service 30 or more days in total. If the vehicle is not fixed, the manufacturer must replace it with one acceptable to the consumer or repurchase it and refund the full purchase or lease price, including collateral and incidental charges, minus a reasonable offset for use; the consumer has an unconditional right to choose a refund.

The lemon law covers newer vehicles. For used cars, the Attorney General advises confirming whether the vehicle is sold "as is" or with a warranty and getting all promises in writing, and notes Iowa law does not generally give a three-day right to cancel a vehicle bought from a dealer's lot.

In a door-to-door sale of consumer goods or services of $25 or more (personally solicited and agreed to somewhere other than the seller's place of business), the seller must give the buyer a completed "Notice of Cancellation" form in duplicate stating that the buyer may cancel without penalty within three business days. After cancellation, payments and trade-ins must be returned within ten business days. The Attorney General notes that other specific contracts, such as buying clubs, funeral services, dating services, health clubs and time shares, may have their own cancellation rights.

Iowa Code chapter 714H (private actions for consumer fraud) lets a consumer who suffers an ascertainable loss of money or property from a prohibited practice sue for actual damages and equitable relief; a consumer awarded actual damages also recovers costs and reasonable attorney fees. If the violation shows willful and wanton disregard for the rights or safety of others, statutory damages of up to three times actual damages may be added. Suits must generally be filed within two years. The Attorney General enforces the Iowa Consumer Fraud Act (Iowa Code § 714.16).

The Attorney General advises requesting a written estimate for repairs expected to cost more than $50, and explains that a shop generally may not charge more than the estimate unless it contacts you with a higher estimate and you approve the extra cost. A shop may not use aftermarket crash parts without first disclosing that in the written estimate.

The Attorney General explains that Iowa's price gouging rule may prohibit excessive price increases on essential goods and services during a declared disaster, evaluated based on timing, necessity and reasonableness. The office has a dedicated price-gouging complaint form.

A credit services organization may not charge or receive payment before completing all promised services unless it has a bond or a surety account at a federally insured Iowa institution, and may not charge just for referring a buyer to a lender offering ordinary terms. A license is required to engage in the business of debt management with Iowa residents, unless exempt.

Contractors (people in the business of construction, other than those earning under $2,000 a year or working on their own property) must register with the Iowa Department of Inspections, Appeals, and Licensing. The Attorney General notes that registration is a useful first check but does not guarantee quality, that promises should be in the written contract, and to be cautious of door-to-door, storm-chasing and up-front-payment offers.

Anyone who owns or licenses computerized personal information used in their business must notify affected consumers after discovering a breach of security, in the most expeditious manner possible and without unreasonable delay, consistent with law enforcement needs and steps to determine contact information and the scope of the breach.

File a consumer complaint with the Attorney General's Consumer Protection Division online (up to three attachments; you should get a confirmation email) or with a printable form. Separate forms exist for bank and mortgage servicing complaints and for price gouging during declared disasters. Contact: consumer@ag.iowa.gov, 515-281-5926, or 888-777-4590 outside the Des Moines metro area.

1) Written notice and final repair attempt: after three repair attempts for the same defect that substantially impairs the vehicle (or one attempt for a defect likely to cause death or serious injury), the consumer may notify the manufacturer in writing, by certified or registered mail or overnight service, so it can make a final attempt to fix it. The manufacturer has 10 days after receiving the notice to offer a repair at a reasonably accessible facility, then 10 days after the vehicle is delivered there to fix it; if it does not, the final-attempt requirement no longer applies. After 20 or more total days out of service, the consumer may send a similar written notice, and the manufacturer then has 10 more days of out-of-service time to fix the vehicle. 2) Arbitration: Iowa has no state-run lemon law arbitration program. If the manufacturer has a program certified under the lemon law and told the consumer in writing how to use it, the consumer must use it before the refund/replacement remedy applies. A certified program may not charge consumers any fee. Its decision is final unless either party petitions district court within 50 days after receiving it or within 25 days after the consumer tells the manufacturer it accepts the decision, whichever comes first. 3) Deadline: if the manufacturer has no certified program (and the consumer gave the written notice), or the program does not decide in time, a lawsuit may be filed within one year after the lemon law rights period (2 years or 24,000 miles, or the warranty term, whichever ends first) expires, or any extension of it. If the manufacturer does not carry out an accepted decision, the consumer may sue within six months after the date the decision set for performance.