On August 12, 2020, Nicholas Brechun, Compliance Supervisor for the Colorado Fair Debt Collection Practices Act (“CFDCPA” or “the Act”), sent out notice of a stakeholder meeting to discuss amendments to the Act. The stakeholder meeting has been scheduled for August 25, 2020 at 2:00 p.m.
The proposed amendments are available in redline here. Most significantly, the suggested rule changes include:
- Rule 1.05(4) – preventing a terminated licensee from selling rights to collect accounts to another licensee, instead only allowing a second licensee to purchase the right of referral from the client;
- Rule 2.03(2) – including contracts, notes, agreements or “[an]other instrument” alongside statute in the list of sources allowing a licensee to suggest adding collection costs to an existing debt; and
- Rule 2.07 – requiring debt collectors to retain call recordings for a two-year period and stating that where both records and summaries are kept, both must be accurate.
The proposed rule changes also provide additional time for collection agencies to perform certain functions, clarify existing timelines, and allow collection agencies to request additional fees for certain services. Those rules include:
- Rule 2.04 – expanding from thirty (30) to thirty-five (35) days the time period in which a collection agency must issue a refund to a consumer that overpays by ten (10) dollars, raised from five (5) dollars;
- Rule 2.05 – changes the time period from five (5) business days to seven (7) calendar days in which a collection agency must refund a payment disputed by the consumer;
- Rule 2.06(1) – expanding the time period to provide a statement of a consumer’s payment following a consumer’s request for the same from ten (10) days to fourteen (14) days and allowing a collection agency to charge ten (10) dollars up from five (5) dollars for each additional statement requested in a year period;
- Rule 2.06(2) – expanding the time period to provide a confirmation statement that a debt has been paid or settled in full to fourteen (14) days up from ten (10) days;
- Rule 2.14(2) – changing the time period from five (5) business days to seven (7) calendar days in which a collection agency must refund payment if a consumer disputes oral payment authorization;
- Rule 3.01(2) – expanding the time period to file a new bank authorization form if a licensee’s trust account information changes from thirty (30) days to thirty-five (35) days within the date of change; and
- Rule 3.02(1) – expanding the time to refund payment made on an unidentified account from thirty (30) days to thirty-five (35) days after the end of the month in which the payment was received.
The proposed changes would also include the below provisions which phase out facsimile and embrace the use of e-mail:
- Rule 1.04(1) – allowing letters admonishing a licensee to be emailed to a licensee’s compliance contact;
- Rule 1.07 – removing facsimile as a method to inform the administrator of a licensee’s address change; and
- Rule 2.15 – a collection agency is no longer required to provide a facsimile number upon request for a licensee’s contact information.
Mr. Brechun’s stakeholder meeting notice requests licensees and interested parties provide “any written feedback on these topics or additional topics for rulemaking at your earliest convenience.” Additionally, that the “final draft of any proposed rules will be published with the Colorado Secretary of State at least 20 days before the rulemaking hearing.”
Troutman Pepper will continue to monitor developments in this area.