Colorado Issues Bi-Annual Report on its FDCPA

In advance of its meeting to discuss collection practices trends and issues, potential rulemaking, and "other business," the Interim Administrator of Colorado's Fair Debt Collection Practices Act (CFDCPA) has issued a its required bi-annual report. The report is new; developed in part as a replacement for the recently dissolved Collection Agency Advisory Board.

Read the full report, which covers the period January 1-June 30, 2018, here.

The Interim Administrator of the CFDCPA, Jan Zavislan, highlights the following:

Enforcement actions

• SBG Acquisitions, LLC, Scott McCune, and Robert Barry - Unlicensed lending. Matter is pending with trial starting October 1, 2018.
• Platinum Holdings Group, LLC; Premium Asset Services, LLC; and Premium Receivables, LLC. - Unlicensed lending, false and deceptive collections, and failure to issue required disclosures to consumers. Matter is pending with trial starting on November 13, 2018.
• Account Management Receivables, LLC and Jeni Hall - Unlicensed collections, false and deceptive collections, and failure to issue required disclosures to consumers. Matter was resolved via Consent Judgment on May 3, 2018 (permanent injunction/$5,000 penalty).
• Colorado v. Hopp, Colorado Court of Appeals - Enforcement action against foreclosure law firm, asserting claims under the CFDCPA and other Colorado laws. Trial court entered judgment in favor of the Administrator on the CFDCPA claims; Colorado Court of Appeals affirmed the judgment in a May 17, 2018 Opinion.
• Colorado v. Castle Law Group, et al., - Enforcement action against foreclosure law firm the Castle Law Group, LLC, asserting claims under CFDCPA and other Colorado laws. Trial court entered order dated November 1, 2017 dismissing Administrator's CFDCPA claims. Administrator appealed; currently pending.

Administrative Enforcement

• Five firms were cited for unlicensed collection activity
• One firm was cited for failure to disclose its local Colorado office location on its communications to consumers (see this recent "iA Perspective" comment about the local office requirement)
• Two firms were cited for non-disclosure of disciplinary action.
• One firm was cited for harrassment/abuse.
• One firm was cited for unfair practices and unlawful acts.
• Two firms were denied licenses - one for unlicensed collection activity, non-disclosure of prior disciplinary action, and the other for CFDCPA violations found on examination.
• Licenses were revoked from two firms - one for non-remittance and one for CFDCPA violations (and, subsequently, went out of business)

Complaints

• In the first six months of 2018 the Consumer Credit Unit received 312 complaints: 210 against licensed collection agencies, 79 against unlicensed agencies, and 23 against attorneys.
• 15 complaints were resolved, 7 were referred to other agenices, 50 resulted in "No Action," 22 resulted in cease & desist orders to unlicensed agencies. Most of the remaining complaints are still under investigation.

Statutory Changes

The following became effective on January 1, 2018:

• A new definition of "debt buyer" 
• New requirements for legal actions on debts owned by debt buyers
• New Administrator duties including reporting requirements, attending industry and advocacy group meetings

Legal Matters

• An Amicus Brief was filed in the Colorado Supreme Court case Ybarra v. Greenberg & Sada, P.C. - issue is whether CFDCPA applies to a subrogation claim
• Addressed the effect of two U.S. Supreme Court cases (Henson v. Santander Consumer USA and Midland Funding, LLC v. Johnson) on interpretation of the Colorado FDCPA.

Matters to be Addressed

The following issues were raised at the January 2018 meeting:

• Need for clarification of the types of documents that must be submitted along with a complaint filed by a debt buyer under new § 5-16-111(2) and (3);
• Private attorneys representing debtors are interested in collecting county court-specific information regarding debt collection practices in order to identify other potential issues/problems;
• Potential violations of the CFDCP A in the collection of medical debt, especially where such debts are referred to a collection agency before a final determination has been made by an insurance company regarding which medical expenses will be covered;
• Need for further clarification regarding the collection of treble damages under the check statute (§ 13-21-109);
• Charging of pre-set amount of attorney fees on every case filed, regardless of whether there are actual fees incurred; and
• The need to examine the number of default judgments filed by certain law firms in order to evaluate whether there is improper or non-existent service of process.

The second required bi-Annual meeting will take place on Monday July 30, 2018 at 1:30pm and is for licensees, industry groups, client groups and other interested parties.  It will take place in Room 1D of the Ralph L. Carr Colorado Judicial Center at 1300 Broadway, Denver, CO 80203.