On 3 April 2017, the Colorado General Assembly held a hearing on the "sunsetting" of Colorado's Fair Debt Collection Practices Act. At issue were six recommendations made in an October 2016 report. This report, and a prior associated hearing, were previously covered by insideARM:
- Continue the CFDCPA for 11 years, until 2028
- Define what is expected of an individual who purchases, sells, or attempts to collect on purchased debt
- Repeal the phrase “arising out of a transaction” from CFDCPA’s definition of “debt”
- Clarify that the statute of limitations in CFDCPA enforcement action is four years
- Sunset the Collection Agency Board
- Allow consumers who have a monetary judgment against a collection agency to access surety bond funds.
There have been some changes between the action items listen in that 2016 report, and the Bill Summary published on 12 April:
- SAME: Continue the CFDCPA for 11 years, until 2028
- CHANGE: Define what is expected of an individual who a collection agency that purchases, sells, or attempts to collect on purchased debt
- CHANGE: Repeal the phrase “arising out of a transaction” from CFDCPA’s definition of “debt” Clarifying that when a collection agency attempts to collect on a debt, the Act applies, by removing language from the definition of "debt"
- SAME: Clarify that the statute of limitations in CFDCPA enforcement action is four years
- SAME: Sunset the Collection Agency Board
- SAME: Allow consumers who have a monetary judgment against a collection agency to access surety bond funds.
The main change for agencies to be aware of is that Colorado is proposing to do away with its Collection Agency Board, replacing it with a set of requirements for a single administrator. From the Bill Summary, pp 6 - 7:
- The administrator shall prepare a report accounting for the efficient discharge of all reponsibilities assigned by law and the general administration of the program on a biannual basis.
- The biannual report will address the following:
- Enforcement actions completed, and whether those actions were appealed or otherwise challenged
- The number of complaints processed and details as to outcomes and resolutions of complaints
- Changes to the program and how they relate to industry or consumer concerns
- A description of any significant legal filings (amicus briefs, summaries of new regulations, legal developments that directly impact the program/program changes, any significant matters that need to be addressed at the request of the regulatred community or public
- The report is to be published by 1 July and 31 December of each year
- The administrator shall attend meetings and conferences of interested and relevant groups and associations:
- At the invitation of the collection agency industry, one local and one national association of collection agencies or other collection agency trade association meeting
- At the invitation of the collection agency industry, one annual meeting or other business entity associations or groups that represent clients of collection agencies, debt buyers or other related trade association
- One annual meeting of a revevant consumer advocacy association
- The administrator will provide minutes from those meetings, published on the attorney general's website and included in the biannual report
- The Administrator shall host an annual public meeting in January of each year
- The Administrator shall host an annual public meeting in July of each year
Other additions to Colorado's Fair Debt Collection Practices Act:
- "Debt Buyers" are collection agencies per Colorado's FDCPA
- Agencies seeking to bring legal action on a debt owned by a debt buyer will need to attach the following materials to its complaint form:
- A copy of the contract, account-holder agreement, or other wititng from the original creditor or the consumer evidencing the consumer's agreement to the original debt. (For medical debt, a copy of a redacted itemization of charges)
- If a signed writing does not exist, a copy of the document provided to the consumer while the account was active demonstrating that the debt was incurred by the consumer. (For credit card debt, the most recent monthly statement)
- If a claim is based on an electronic transaction for which there's nothing signed/in writing, a copy of the records created during the transaction that shows the consumer's agreement
- A copy of the assignment or other writing establishing that the debt buyers is the owner of the debt
- If the debt as assigned/sold more than once, each assignment must be attached to establish an unbroken chain of ownership
- Plaintiffs will need to file with the court evidence that satisfies the erequrements of Rules 803(6) and 902(11)
- The original account number at charge-off
- The original creditor at charge-off
- Amount due at charge-off
- An itemization of post charge-off additions (if any)
- Date of last payment
- Date of last transaction
- Date the debt was incurred (unless this is a revolving account)
- In the absence of any of the evidence required, an affidavit does NOT satisfy the requirements.
Agencies holding paper from Colorado consumers should understand that these sunset reviews, which happen every 11 years, will never end with the sunsetting of Colorado's own FDCPA. Colorado has made consumer protections a priority.
Additionally, agencies working with debt buyers -- and debt buyers as well -- will need to make sure their chains of title are absolutely clean. Compliance departments would do well to spend time reviewing the media requirements for filing suit. And while it may seem overkill, implementing those same requirements for all accounts seems the safest harbor. States share information, and what works in Colorado could become popular elsewhere.