The Colorado Fair Debt Collection Practices Act is the main regulatory law that governs the actions of collection agencies in Colorado. This law prohibits collection agencies from engaging in harassing, misleading or unfair practices. The Colorado Collection Agency Board regulates collection agencies and takes disciplinary action when a collection agency violates the law. The Board oversees the licensing and registering of all collection agencies that do business in Colorado.
Licensing
The Colorado Collection Agency Board oversees the registration and licensing of all collection agencies that do business in Colorado. All collection agencies must receive a license from the Board before doing business in Colorado. An application for a license costs $300 as of 2010. Every licensee must maintain an office in Colorado that is open to the public during business hours so that debtors can make payments. Debtors should be able to access their payment records and account records from this Colorado office. Collectors who collect their own debts, and agencies collecting only commercial, business, investment and agricultural debts do not have to obtain a collection agency license.
Collections Manager
Every Colorado collection agency has to employ a collections manager who is responsible for the agency's compliance with Colorado's laws. The collections manager must ensure that all debt collectors and all solicitors employed by the collection agency register with the Colorado Collection Agency Board each year. The collections manager must make sure that the agency is not adding illegal fees to a debt. For example, no agency can charge for the costs involved in collecting a debt, unless such costs are expressly authorized by the contract between the debtor and the creditor. Further, the manager must make sure that the agency is not harassing debtors who are making regular payments on their account.
Accounting
The Fair Debt Collection Practices Act requires collection agencies to keep a careful accounting of payments and debts. The collection agency must provide a receipt to a debtor for all cash payments within five business days after receiving a payment. Upon written request, the agency must send a written statement to the debtor. The statement must include the consumer's name, the amounts paid, the creditor's name, all payment dates and the current balance due. If a person overpays a debt to a collection agency in an amount greater than $5.00, the agency has to issue a refund to that consumer. The agency has 30 days after the overpayment date to refund the money.
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