In most years, legislation to significantly improve consumer protections and redirect the way businesses operate would be subject to high-profile committee hearings with lots of witnesses, charges and counter charges. It would also likely go down to the last minute of the session with lobbyists and activists nervously counting and recounting votes.
But not this session.
The Colorado General Assembly took a major step forward by passing the continuation of the Colorado Fair Debt Collection Practices Act (SB17-216) which protects Colorado consumers from being sued by debt buyers over debts that are either not theirs, they have contested or have already paid off. This rather quiet victory can be chalked up to the willingness of consumer activists, industry representatives and a bipartisan group of lawmakers to come together, work through their differences and craft language that meets the needs of all involved. It passed with large bipartisan majorities in both chambers.
Debt buyers are a relatively new industry where companies buy consumer debts for cents on the dollar with the goal of collecting the full amount owed. In many cases, they purchase spreadsheets that contain limited information on the name of the creditor, the amount of the debt and the person’s last known address. Often, the debts they cannot collect are repackaged and sold and the information about the consumer who owed the debt is lost or mangled. As a result, many consumers are sued for debts that are not theirs.
This session, all parties came together and agreed on the common-sense notion that before a debt buyer can take a consumer to court to force collection of a debt they need to present valid evidence that they own the debt, that the consumer owes the debt and the amount of the debt owed. This creates a fair process in which creditors can collect the debts they are owed while protecting consumers from lawsuits — many filed without sufficient information — that subject them to collection actions for debts that are not theirs.
While it lacked the high drama of a late session showdown, this bill accomplishes a great deal and puts Colorado in the forefront of states that are modernizing their laws governing debt buyers.