Many consumers may find themselves in uncomfortable positions when they borrow or owe money and are unable to pay on time. In some situations, creditors will pursue collection on their own and come after the consumer directly to recover the money owed. In other situations, however, a creditor may get a debt collector or collection agency involved to help collect the debt.
Regardless of the situation, consumers have rights under Colorado law that prevent creditors and debt collectors or collection agencies from engaging in certain conduct that is intended to harass or deceive consumers.
In Colorado, the Colorado Uniform Consumer Credit Code provides consumers with a right to protection from certain creditors. The law applies to actions taken by creditors collecting on their own debts arising from consumer credit transactions, such as borrowing on a credit card. The act only applies to consumer credit transactions, which are credit sales or loans, of less than $75,000, to individuals for personal, family, or household purposes. Under this law, some specific actions taken by creditors attempting to collect on a debt are made illegal. These actions include:
- Using or threatening force.
- Making phone calls to consumers or their families frequently or at unusual hours.
- Making false misrepresentations to consumers.
- Causing or threatening to cause injury to a consumer’s reputation or economic status.
Additionally, if consumers are late in making payments, creditors must notify them of their right to cure. The right to cure entitles a consumer to pay all past due sums and late charges within 20 days. However, consumers are not entitled to this right to cure if they have been late in making a payment more than once in a year.
For more information on the Colorado Uniform Consumer Credit Code, please visit the “Uniform Consumer Credit Code” page on the Colorado Attorney General’s website.
- Debt Collectors & Collection Agencies
In the event that a consumer cannot make payments on personal debts, the debts may be turned over to a debt collector or collection agency. Debt collectors can be collection agencies, or people, such as lawyers, that regularly collect debts owed to others. The Colorado Fair Debt Collection Practices Act, similar to the Federal Fair Debt Collection Practices Act, aims to protect consumers from unfair and potentially abusive debt collection practices. Although business debts are not covered by the act, Under the Colorado Fair Debt Collection Practices Act, debt collectors are prohibited from engaging in certain conduct, including:
- Making public the fact that a consumer owes a debt.
- Using or threatening force.
- Using obscene or profane language.
- Making phone calls to consumers before 8:00 a.m. or after 9:00 p.m.
- Making false representations about how much consumers owe, or what the consequences of nonpayment are.
- Disclosing false credit information about consumers to anyone else.
In addition to these prohibitions, debt collectors have several obligations under the Colorado Fair Debt Collection Practices Act. First, debt collectors must provide consumers with notice stating the amount owed, and identifying the creditor within 5 days of contacting them. After receiving that notice, consumers have 30 days to dispute the debt. Also, debt collectors must stop contacting consumers if they request that the debt collector stop in writing. Although consumers can stop communications with debt collectors and refuse to pay a debt, they may still be responsible for the money owed and the debt collector can sue to collect it.
To find out more information about the specific collection agency you are dealing with, you can visit the “Collection Agencies License Information” page on the Colorado Attorney General’s website.
For additional information on the Colorado Fair Debt Collection Practices, you can visit the “Consumer Rights Information” page on the Colorado Attorney General’s website.