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How far back in time can a camping club go to collect back dues?
Cutty’s Des Moines Camping Club, Inc., which manages an 82-acre RV park and campground in Grimes, Iowa, is about to find out because the Iowa Attorney General’s office has filed a consumer protection lawsuit against the club, alleging that it is violating the Iowa Consumer Fraud Act through its efforts to collect membership dues dating back, in some cases, as much as 15 years.
The lawsuit, filed Oct. 22 in Polk Country District Court, seeks temporary and permanent injunctions barring the club from engaging in the alleged illegal collection practices. The lawsuit also seeks reimbursements for consumers.
“We’re going to dispute it,” James Mollendor, manager of Cutty’s Des Moines Camping Club, told Woodall’s Campground Management, a sister publication of RV Business and RVBUSINESS.COM. “What they’re saying is it’s illegal to collect past dues.”
Mollendor said he was surprised by the state’s action because his company has previously taken people to court and won judgments for past dues. But he worries about the outcome of his case, which he said could affect the ability of other clubs and organizations to collect back membership dues. “We see this as a test case for the industry,” he said, adding, “It’s a crazy situation.”
The Iowa Attorney General’s Office doesn’t see it that way, however.
Bob Brammer, a spokesman for Attorney General Tom Miller, said the state’s lawsuit was prompted by multiple factors, including the club’s alleged lack of adequate records to substantiate delinquent dues and questions regarding ambiguous purchase agreements with consumers.
The lawsuit also alleges that many consumers who purchased shares in the club nearly 20 years ago have ceased using the campground facilities and that “there is little market for these consumers to sell their shares privately and terminate the financial obligation.”
The campground at issue in the lawsuit was originally owned by Cutty’s Inc., which in 1980 created a camping club by selling 3,000 shares in the park to consumers. According to the Attorney General’s office, the purchase price of the shares ranged from about $3,000 to $5,800. Membership dues started at $96 per year, but have since risen to $400 per year. Cutty’s Inc. is not named as a defendant in the lawsuit.