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On December 14, 2022, the Colorado Attorney General (AG) announced that it entered into a consent order with a
California-based debt management company and its sister lending
company, resolving the AG’s examination findings that those
companies violated Colorado’s Uniform Consumer Credit Code,
C.R.S. § 5-1-101, et seq. (“UCCC”) and Debt
Management Services Act, C.R.S. § 5-19-201 et seq.
(“DMSA”).
In Colorado, it is unlawful for a company that provides debt
management services to also lend money or provide credit to the
same consumer. Here, a California-based debt management company
formed a sister lending company, which was licensed to operate in
Colorado. Both companies operated their businesses in Colorado and
serviced the same consumers, which the AG purports was unlawful
because the companies had a common owner. Additionally, the
AG’s examination found that some consumers’ agreements were
allegedly unsigned by the debt management company in violation of
Colorado law.
Under the consent order, neither company can enroll new Colorado
consumers for the next two years and the companies are required to
issue $200,000 in refunds. Sixty percent of the $200,000 will go to
24 consumers who were subject to cross-selling, and the remaining
forty percent will go to the 238 consumers who had unsigned
agreements from the debt management company.
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