Colorado Fair Debt Collection Practices Act Expands to Cover Debt Buyers

The Colorado Fair Debt Collection Practices Act (FDCPA) has been extended until Sept. 1, 2028, and debt buyers will be classified as collection agencies under Colorado law S.B. 216.

The revised law will apply to debt buyers for consumer debts sold or resold on or after Jan. 1, 2018. Debt buyers, which were previously undefined in the state act, will now be classified as “a person who engages in the business of purchasing delinquent or defaulted debt 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 remain exempt from the act’s bond requirements so long as the debt buyer does not provide third-party collection services.

The law also establishes requirements for any legal actions on purchased debts. A debt collector or collection agency is now required to attach “a copy of the contract, account-holder agreement, or other writing from the original creditor or the consumer evidencing the consumer's agreement to the original debt.” A copy of a redacted itemization of charges must be attached for medical debts.

If no written evidence is available, the debt collector is required to attach to the complaint a copy of the document provided to the consumer while the account was active, demonstrating that the debt was incurred by the consumer or, for a credit card debt, the most recent monthly statement recording a purchase transaction, payment, or balance transfer.

A debt collector or collection agency must also attach a copy of the assignment or other writing establishing that the debt buyer is the owner of the debt, and a complete chain of title for debts that were assigned more than once.

The revised law also requires a plaintiff to file evidence with the court satisfying the state's evidentiary rules. An affidavit is insufficient to meet the new documentation requirements for legal actions. The evidence must establish the amount and nature of the debt, including the original account number and creditor at charge-off; the amount due at charge-off; an itemization of post charge-off interest (if any); the date of the last payment or transaction; and the date the debt was incurred (unless the account is a revolving credit account).

Additionally, the new law clarifies that a two-year statute of limitations applies to administrative actions to enforce liability and a one-year statute applies to private actions by consumers