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Legislature considers fraud bill

BY OLIVIA MORAN | FEBRUARY 16, 2009 7:50 AM

In Iowa, nobody is safe from fraud — especially after a devastating flood.

Individuals in flood-stricken areas are still struggling financially after a wave of businesses collected money for what resulted in fraudulent services last year, but state officials are pushing for a new law that would make it easier for them to file a lawsuit.

Bill Brauch, head of the Consumer Protection Division at the Office of the Attorney General, said Iowa would be the last state to enact such a law. Arkansas became the 49th state to adopt the legislation about 10 years ago.

In Iowa, the Attorney General’s Office is the only office that can file consumer fraud cases, and it typically only happens in multimillion dollar cases because of a lack of resources.

If the bill were passed, “not only can the attorney general enforce it, but an individual can bring an action if they’ve been damaged or injured,” Brauch said. “They can get their damages. That’s not asking a lot.”

Corey Luedeman, an attorney with the Cedar Rapids office of Iowa Legal Aid — which provides free legal services for low-income individuals — said he is dealing with at least six consumer fraud cases and the six other attorneys on staff are each working on at least one as well.

Luedeman said post-flood victims typically hand over thousands of dollars to fraudulent contractors simply because they’re desperate and don’t know any better.

“The common threat is they’re low income,” he said.

Scam artists prey upon victims of a natural disaster as a whole, but also specifically target elderly people, said Anthony Carroll, the Iowa AARP associate state director for advocacy who is also a supporter of the bill.

Carroll had only one suggestion for businesses who oppose the legislation: “Don’t be dishonest.”
Since 2000, Brauch said the Attorney General’s office has been advocating for the bill but made no progress because of widespread business opposition.

The Iowa Legislature website shows dozens of Iowa businesses who oppose the idea such as CVS, Mediacom, and Kum and Go. Many are undecided.

“They’re concerned about frivolous lawsuits,” Brauch said. “The business community has risen up as if we were trying to steal their livelihood. It’s really an irrational position for them to take.”
But Brauch said the office is more optimistic this year about the law passing.

“The idea for this and the importance for it comes from the attorneys and other staff members in the Consumer Protection Division who have to turn away hundreds of people every year,” he said. “I think it’s a fair law, and I think that people of Iowa can rest assured.”


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