The Iowa Supreme Court ruled that a Des Moines Camping Club could not collect past membership dues, stating that consumers joining any membership-type business could terminate if conditions or terms changed.
According to ConsumerReports.com, the court ruled against Cutty’s Des Moines Camping Club Inc., which had attempted to collect past campground dues from some of its members.
The State Attorney General’s Office filed suit, charging that the club’s efforts to collect past dues of thousands of dollars amounted to an unfair practice under Iowa law.
The suit claimed the club tried to collect purportedly long-past due amounts of up to $4000 from individual consumers, even though many consumers had ceased using the campground and Cutty’s policies had made membership shares “virtually unmarketable” for sale to other consumers.
Attorney General Tom Miller said the court’s ruling sharpens consumer protection statutes for the benefit of all consumers.
The campground originally was owned by Cutty’s Inc., which in 1980 decided to create a camping club by selling 3,000 “shares” in the campground to consumers. Membership dues originally started at $96 per year, but rose to approximately $400 per year – an increase of nearly 400%.
While membership dues rose, the Camping Club and Cutty’s Inc. continued to hold unsold shares and had made no effort to sell new membership shares since about 1986-88.