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Regulation of Debt-Related Services

Concerning measures to increase consumer protections in transactions with debt-related services.
2024 Regular Session
Business & Economic Development
Courts & Judicial
Financial Services & Commerce
Bill Summary

The bill makes the following actions by a debt collector or collection agency that is subject to the "Colorado Fair Debt Collection Practices Act" unfair or deceptive trade practices under the "Colorado Consumer Protection Act" (consumer protection act):

  • Taking any legal action on a debt against a consumer if the debt collector or collection agency is the named plaintiff unless if the debt collector, or collection agency, has purchased complete ownership of the debt, without any ownership interest retained by the seller, original creditor, or other third party or debt purchaser does not comply with specified laws governing legal actions by collection agencies ; and
  • Seeking or supporting a warrant or otherwise promoting the arrest or detainment of a consumer, including on motions related to discovery or contempt of court, in any legal action against the consumer in connection with an action to collect or attempt to collect a debt.

A creditor that is owed a consumer debt and seeks or supports a warrant or otherwise promotes the arrest or detainment of a consumer in any legal action against the consumer in connection with an action to collect or attempt to collect the debt commits a deceptive trade practice under the consumer protection act.

A debt collector or collection agency that is not a creditor or debt buyer is prohibited from being the named plaintiff in a legal action on a debt against a consumer unless the debt collector or collection agency:

  • Ensures that the name of the plaintiff in the case caption is listed as the name of the original creditor or assignor and the name of the debt collector or collection agency, in that order;
  • Has a complete and effective assignment, including complete settlement authority and authority to resolve the litigation; and
  • Ensures, if there are multiple original creditors or assignors in a legal action, that each is listed in the case caption as a separate plaintiff and that their inclusion in the action complies with rules regarding permissive joinder.

The bill requires credit services organizations to file notification with and pay a fee to the administrator of the uniform consumer credit code (administrator) within 30 days after commencing business in Colorado and, thereafter, on or before July 1 of each year.

The administrator may order a person to cease and desist from engaging in violations of the "Colorado Credit Services Organization Act" (CCSOA). An order issued by the administrator may require the person to pay to a buyer a refund of unlawful charges under the CCSOA charged to the buyer and to pay an administrative penalty of up to $1,500 per violation. A person aggrieved by an order of the administrator may seek judicial review of the order in the Colorado court of appeals.

The bill clarifies that a plan that a debt management services provider prepares for an individual to make regular, periodic payments must meet the definition of "plan" in the "Uniform Debt-Management Services Act".

The bill also clarifies that if a debt management services provider utilizes the internet or other electronic means to meet specific compliance requirements, including disclosures, reporting requirements, and record-keeping requirements, the provider must obtain a consumer's consent at the time of satisfying the requirements.

The bill repeals provisions outlining the fees a debt management services provider may charge and requires the administrator to adopt rules specifying the nature and amount of permitted fees.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)

(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)


Under Consideration


Bill Text

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The effective date for bills enacted without a safety clause is August 7, 2024, if the General Assembly adjourns sine die on May 8, 2024, unless otherwise specified. Details