2009 Iowa Code
Title 13 - Commerce
Subtitle 3 - Money and Credit
CHAPTER 537 - CONSUMER CREDIT CODE
537.5108 - UNCONSCIONABILITY -- INDUCEMENT BY UNCONSCIONABLE CONDUCT -- UNCONSCIONABLE DEBT COLLECTION.

        537.5108  UNCONSCIONABILITY -- INDUCEMENT BY
      UNCONSCIONABLE CONDUCT -- UNCONSCIONABLE DEBT COLLECTION.
         1.  With respect to a transaction that is, gives rise to, or leads
      the debtor to believe it will give rise to a consumer credit
      transaction, in an action other than a class action, if the court as
      a matter of law finds the agreement or transaction to have been
      unconscionable at the time it was made, or to have been induced by
      unconscionable conduct, the court may refuse to enforce the
      agreement, or if the court finds any term or part of the agreement or
      transaction to have been unconscionable at the time it was made, the
      court may refuse to enforce the agreement, or may enforce the
      remainder of the agreement without the unconscionable term or part,
      or may so limit the application of any unconscionable term or part as
      to avoid any unconscionable result.
         2.  With respect to a consumer credit transaction, or a
      transaction which would have been a consumer credit transaction if a
      finance charge was made or the obligation was payable in
      installments, if the court as a matter of law finds in an action
      other than a class action, that a person has engaged in, is engaging
      in, or is likely to engage in unconscionable conduct in collecting a
      debt arising from that transaction, the court may grant an injunction
      and award the consumer any actual damages the consumer sustained.
         3.  If it is claimed or appears to the court that the agreement or
      transaction or any term or part of it may be unconscionable, or that
      a person has engaged in, is engaging in, or is likely to engage in
      unconscionable conduct in collecting a debt, the parties shall be
      afforded a reasonable opportunity to present evidence as to the
      setting, purpose, and effect of the agreement or transaction or term
      or part thereof, or of the conduct, to aid the court in making the
      determination.
         4.  In applying subsection 1, consideration shall be given to each
      of the following factors, among others, as applicable:
         a.  Belief by the seller, lessor, or lender at the time a
      transaction is entered into that there is no reasonable probability
      of payment in full of the obligation by the consumer or debtor.
      However, the rental renewals necessary to acquire ownership in a
      consumer rental purchase agreement shall not be construed to be the
      obligation contemplated in this subsection if the consumer may
      terminate the agreement without penalty at any time.  As used in this
      paragraph, "obligation" means the initial periodic lease payments
      and any other additional advance payments required at the
      consummation of the transaction.
         b.  In the case of a consumer credit sale, consumer lease, or
      consumer rental purchase agreement, knowledge by the seller or lessor
      at the time of the sale or lease of the inability of the consumer to
      receive substantial benefits from the property or services sold or
      leased.
         c.  In the case of a consumer credit sale, consumer lease, or
      consumer rental purchase agreement, gross disparity between the price
      of the property or services sold or leased and the value of the
      property or services measured by the price at which similar property
      or services are readily obtainable in consumer credit transactions by
      like consumers.
         d.  The fact that the creditor contracted for or received
      separate charges for insurance with respect to a consumer credit sale
      or consumer loan with the effect of making the sale or loan,
      considered as a whole, unconscionable.
         e.  The fact that the seller, lessor or lender has knowingly
      taken advantage of the inability of the consumer or debtor reasonably
      to protect the consumer's or debtor's interests by reason of physical
      or mental infirmities, ignorance, illiteracy or inability to
      understand the language of the agreement, or similar factors.
         f.  The fact that the seller, lessor or lender has engaged in
      conduct with knowledge or reason to know that like conduct has been
      restrained or enjoined by a court in a civil action by the
      administrator against any person pursuant to the provisions on
      injunctions against fraudulent or unconscionable agreements or
      conduct in section 537.6111.
         5.  In applying subsection 2, violations of section 537.7103 shall
      be considered, among other factors, as applicable.
         6.  If in an action in which unconscionability is claimed the
      court finds unconscionability pursuant to subsection 1 or 2, the
      court shall award reasonable fees to the attorney for the consumer or
      debtor.  If the court does not find unconscionability and the
      consumer or debtor claiming unconscionability has brought or
      maintained an action the consumer or debtor knew to be groundless,
      the court shall award reasonable fees to the attorney for the party
      against whom the claim is made.  Reasonable attorney's fees shall be
      determined by the value of the time reasonably expended by the
      attorney on the unconscionability issue and not by the amount of the
      recovery on behalf of the prevailing party.
         7.  The remedies of this section are in addition to remedies
      otherwise available for the same conduct under law other than this
      chapter, but no double recovery of actual damages may be had.
         8.  For the purpose of this section, a charge or practice
      expressly permitted by this chapter is not in itself unconscionable.
      

         Section History: Early Form

         [C75, 77, 79, 81, § 537.5108] 

         Section History: Recent Form

         87 Acts, ch 80, §45--47
         Referred to in § 537.3617, 537.6111