The Iowa Attorney General's office vigorously enforces the Iowa Debt Collection Practices Act, Iowa Code sections 537.7101-537.7103, and we strongly urge all debt collectors to become familiar with this law before beginning collection activities in Iowa. You may wish to consult with private legal counsel as to the law's various requirements.
Please note that Iowa does not license debt collectors. However, debt collectors who collect over $25,000 a year total (all accounts, not just Iowa accounts) are required to register with the Iowa Attorney General and pay a $10.00 annual fee. This requirement is detailed in the Iowa Consumer Credit Code (ICCC), chapter 537, Iowa Code sections 537.6201-537.6203. The Attorney General, who is responsible for administering the ICCC, has adopted an administrative rule, 61 Iowa Administrative Code Chapter 22, implementing this section.
Debt collectors should review the following criteria to determine whether they must file a notification statement with our office and pay the annual fees:
Does the debt collector collect consumer debts from Iowans? Note that the definition of consumer debt under Iowa law is quite broad and includes a variety of debts other than consumer credit transactions. For example, debt collectors collecting dishonored checks, medical bills, accounts based on "90 days same-as-cash" and typical accounts receivable billings (for consumer purposes) are likely to be covered. Generally, debts incurred for personal, family or household purposes, where credit was extended that did not exceed $25,000, and the debtor was an individual, would be covered under Iowa law. The definitions of "debt", "debt collector" and "debt collection" are found in Iowa Code section 537.7102.
2. Did the debt collector collect over $25,000 in total debts in the previous or current calendar year? This $25,000 requirement is based on the aggregate amount of debt collected from all sources and is not based just on Iowa accounts. Therefore, a debt collector who collected $50,000 in debts last year, $5,000 of which was from Iowa debtors, would still be covered under Iowa's notification and fees provisions.
Debt collectors required to file a notification statement with the Iowa Attorney General must do so within 30 days of commencing collection activities in Iowa, and then by January 31 of every subsequent year. The current annual notification fee is $10.00. The check should be made payable to the "Iowa Consumer Credit Administration Fund" and sent to the Consumer Protection Division of the Iowa Attorney General's Office at 1300 E Walnut, Des Moines, IA 50319.
Failure to file a notification statement and pay the appropriate fees subjects debt collectors to late fees of $25 as well as a possible civil action in which the administrator may recoup interest, the costs of the action, and a penalty not exceeding the greater of $1,000 or three times the fee owed. See Iowa Code sections 537.6113(3) and 537.6203(4).
Please also note that the Iowa Debt Collection Practices Act does not apply solely to third party collectors: it also applies to creditors collecting their own debts. While most creditors collecting their own debts are not required to register as a debt collector, they nevertheless must comply with the substantive requirements of the Iowa Debt Collection Practices Act, Iowa Code sections 537.7101- 537.7103.
Attorneys who act as debt collectors are not exempt from notification. A law firm whose attorneys act as debt collectors and collect over $25,000 a year must file notification with this office.
Finally, Iowa also requires private investigators to obtain a license and bond. These requirements are detailed in Iowa Code chapter 80A. The range of activities covered under this chapter is broad, and includes obtaining information on the "habits, conduct, movements, whereabouts, associations, transactions, reputations, or character of a person." Iowa Code section 80A.1(6). Therefore, certain traditional debt collection activities, such as skip-tracing, might require licensor under this statute. If you have any questions about chapter 80A, please consult your legal counsel or the Iowa Department of Public Safety (515-281-7610).