Governor John Hickenlooper recently signed a bill extending until September 1, 2028, the Colorado Fair Debt Collection Practices Act (CFDCPA), which prohibits harassment, misleading, and unfair practices in the collection of debts. The CFDCPA governs the actions of collection agencies and debt collectors and requires that they be licensed with the State of Colorado. The law, which was set to expire on July 1, 2017, does not apply to creditors collecting their own debts.

Along with the 11-year extension of the Act, Colorado enacted several new provisions that go into effect on January 1, 2018. Most notably, the new provisions extend the scope of the CFDCPA to include "Debt Buyers," defined as "a person who engages in the business of purchasing delinquent or defaulted debts for collection purposes, whether it collects the debt itself, hires a third party for collection, or hires an attorney for litigation in order to collect the debt. Debt Buyers are collection agencies for the purposes of the [CFDCPA]."

Under the CFDCPA, collection agencies in Colorado generally must post a surety bond or assign a cash deposit with the Colorado Attorney General's office. The amount of the bond depends on the agency’s average annual collections and serves to protect clients who hire collection agencies to collect debts but do not receive remittances of money collected. Under the new provisions, Debt Buyers are not subject to the surety bond requirement as long as they do not also provide third-party debt collection. Debt Buyers will be subject to the licensing and other requirements of the CFDCPA.

The new CFDCPA provisions also include stricter requirements for collection agencies seeking to obtain a default judgment. Collection agencies must now provide evidence of each assignment or transfer of ownership of the debt establishing an unbroken chain of ownership beginning with the original creditor. The new provisions also contain specific requirements regarding which types of materials suffice as written evidence of the debt and require an itemized accounting of all amounts due. These stricter default judgment requirements will apply to Debt Buyers.

Finally, the Colorado Attorney General's Office, through the Administrator of the CFDCPA, will continue to investigate complaints and take disciplinary or legal action when a debt collector or collection agency has violated the law. Under the new provisions, it is now clear that a two-year statute of limitations applies to these enforcement actions. The new provisions also include expanded requirements for the Administrator to engage in community outreach in the form of public meetings and to prepare and publish reports that detail the Administrator’s actions in pursuing enforcement actions, processing and resolving complaints, and other relevant information through the Colorado Attorney General’s website. The new law also abolished the five-member collection agency board that the Administrator had supervised.

Attorneys in Ballard Spahr's Consumer Financial Services Group regularly advise clients on compliance with the Fair Debt Collection Practices Act and state debt collection laws and defend clients in FDCPA lawsuits and enforcement matters. The Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws throughout the country, and its skill in litigation defense and avoidance.


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