Iowa gets tougher on auto repair shopsA new law that takes effect this week in Iowa means consumers won't be stranded indefinitely by auto repair shops holding their vehicles hostage while trying to collect extra money from them.

Senate File 2180 allows the Iowa Attorney General to intervene on behalf of the customer when an auto repair company is found to have kept their car unlawfully.

Iowa, like other states, has a law that allows car repair shops to retain the vehicle until the customer pays the bill. An investigator with the Attorney General's office noticed a recurring complaint from consumers about some companies taking advantage of the law.
"In Iowa, the repair shop cannot charge above the estimate unless the repair shop gets the customer's approval for this higher charge. We thought it was fundamentally unfair for the repair shop to say, 'We're going to keep your car until you pay this higher bill,'" said Bill Brauch, director of the Consumer Protection Division in the Iowa Attorney General's office.

Situations where the shop would be violating the law include:
  • Charging more than the estimate without customer approval.
  • Re-assembling the car without notifying the customer.
  • Performing repairs that the customer can prove unnecessary.
A recent settlement in New Jersey refunded customers charged for work the repair shops never did, which would also likely violate the new Iowa law.

Now, once a customer files a complaint with the Attorney General, the office conducts an investigation. If found to be in violation of the law, they will send a letter requiring the repair shop to return the car within one business day

This does not necessarily change the investigation process, but instead aids the Attorney General's office in dealing with these cases. "Before this law, we had to tell the customer, you have to pay your bill and then file a complaint. Now we can say, you don't have to pay that bill right now and we can get your car, " said Brauch.

While the customer may have their wheels returned, it may not be the end of the interaction with the auto repair shop. Brauch noted that the company can still claim those fees as lawful and sue the customer for not paying them. "Turning the car over does not release any rights that the car repair shop might have to collect," said Brauch. "They just can't hold the car to try to put pressure on the customer."

When paying for potentially hefty car repairs, the Federal Trade Commission advises to ask shops how prices work -- some charge a flat rate for labor and others charge for the time spent on the repair. Seek a second opinion and always have the repair shops' estimates in writing.

"Most auto repair shops don't violate the law; they treat their customers well," said Brauch. "But there are some that have generated complaints like this for a long period of time and we're glad to have this additional tool."

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