The
CO ST T. 12, Art.
14.5
Title 12. Professions and Occupations
General
Article 14.5.
§ 12-14.5-101. Short
title
This article shall be known and may be cited as the "Colorado
Credit Services Organization Act".
§ 12-14.5-102.
Legislative declaration
(1) The general assembly finds and declares that:
(a) The ability to obtain and use credit has become of great
importance to consumers, who have a vital interest in establishing and
maintaining their creditworthiness and credit standing. The extension or
receipt of credit has value and should be protected. As a result, consumers who
have experienced credit problems may seek assistance from credit services
organizations which offer to obtain credit or improve the credit standing of
such consumers.
(b) Certain advertising and business practices of some credit
services organizations have worked a financial hardship upon the people of this
state, often those who are of limited economic means and inexperienced in credit
matters. Credit services organizations have significant impact upon the economy
and well-being of this state and its people.
(c) The purposes of this article are to provide prospective buyers
of services of credit services organizations with the information necessary to
make an intelligent decision regarding the purchase of those services and to
protect the public from unfair or deceptive advertising and business practices;
and
(d) This article shall be construed liberally to achieve these
purposes.
§ 12-14.5-103.
Definitions
As used in this article, unless the context otherwise requires:
(1) "Buyer" means any individual who is solicited to
purchase or who purchases the services of a credit services organization.
(2) "Credit services organization" means any person who,
with respect to the extension of credit by others, represents that such person
can or will, in return for the payment of money or other valuable consideration
by the buyer, improve or attempt to improve a buyer's credit record, history,
or rating. The term "credit services organization" does not include
the following:
(a) Any nonprofit
organization exempt from taxation under section 501(c)(3) of the federal
"Internal Revenue Code of 1986"; or
(b) Any person licensed
to practice law in this state if such person renders such credit services
within the course and scope of said person's practice as an attorney.
(3) "Extension of credit" means the right to defer
payment of debt or to incur debt and defer its payment offered or granted
primarily for personal, family, or household purposes.
(4) "Person" includes any individual, corporation,
partnership, joint venture, or any business entity.
(5) Repealed by Laws 2003,
§ 12-14.5-104.
Prohibited acts
(1) A credit services organization; its salespersons, agents, and
representatives; and independent contractors who sell or attempt to sell the
services of a credit services organization shall not:
(a) Charge or receive any money or other valuable consideration
prior to full and complete performance of the services the credit services
organization has agreed to perform for the buyer;
(b) Make, counsel, or advise any buyer to make any statement that
is untrue or misleading to a credit reporting agency or to any person who has
extended credit to a buyer or to whom a buyer is applying for an extension of
credit with respect to a buyer's creditworthiness, credit standing, or credit
capacity;
(c) Make or use any untrue or misleading representations in the
offer or sale of the services of a credit services organization or engage,
directly or indirectly, in any act, practice, or course of business that
operates or would operate as fraud or deception upon any person in connection
with the offer or sale of the services of a credit services organization; or
(d) Make, counsel, or advise any buyer to make a request to a
credit reporting agency to verify information contained in a consumer credit
report, unless the buyer states in writing to the credit services organization
that the buyer believes the information to be verified is incorrect or
inaccurate, and states specifically the basis of the inaccuracy or
incorrectness of each disputed item of information.
§ 12-14.5-105. Repealed
by Laws 2003, Ch. 295, § 17, eff. July 1, 2003
§ 12-14.5-106. Written
disclosure required
Before the execution of a contract or agreement between the buyer
and a credit services organization or before the receipt by the credit services
organization of any money or other valuable consideration, whichever occurs
first, the credit services organization shall provide the buyer with a
statement in writing containing all the information required by section 12-14.5-107.
The credit services organization shall maintain on file for a period of two
years an exact copy of the statement, personally signed by the buyer,
acknowledging receipt of a copy of the statement.
§ 12-14.5-107. Content
of written disclosure
(1) The information statement required pursuant to section 12-14.5-106 shall be printed in at least ten-point type and shall include:
(a) The following statements concerning consumer credit reports
and consumer credit agencies:
"RIGHTS
UNDER
You have a right to obtain a copy of your credit report from a
credit bureau for a small fee. You have a right to dispute inaccurate
information by contacting the credit bureau directly. However, you have no
right to have accurate information removed from your credit bureau report.
Under the federal "Fair Credit Reporting Act", the credit bureau must
remove accurate negative information from your report only
if it is over 7 years old. Bankruptcy can be reported for 10 years. Even when a
debt has been completely repaid, your report can show that it was paid late if
that is accurate. You have a right to sue a credit repair company that violates
the "Colorado Credit Services Organization Act". This law prohibits
deceptive practices by repair companies. The "Colorado Credit Services
Organization Act" also gives you a right to cancel your contract for any
reason within 5 working days from the date you sign it.
The Federal Trade Commission enforces the federal "Fair
Credit Reporting Act". For more information, call or write the Federal
Trade Commission. The administrator of the uniform consumer credit code
enforces the "Colorado Credit Services Organization Act". For more
information, call or write the
(b) A complete and detailed description of the services to be
performed by the credit services organization for the buyer and the total
amount the buyer will have to pay, or become obligated to pay, for the
services;
(c) Deleted by Laws 2003, Ch. 295, § 18, eff. July 1, 2003.
(d) Deleted by Laws 2003,
§ 12-14.5-108. Written
contracts required
(1) Each contract between the buyer and a credit services
organization for the purchase of the services of the credit services
organization shall be in writing, dated, signed by the buyer, and include the
following:
(a) A conspicuous statement in bold-faced type, in immediate
proximity to the space reserved for the signature of the buyer, as follows:
"You, the buyer, may cancel this contract at any time prior to midnight of
the fifth working day after the date of the transaction. See the attached
notice of cancellation form for an explanation of this right."
(b) The terms and conditions of payment, including the total of
all payments to be made by the buyer, whether to the credit services organization
or to some other person;
(c) A full and detailed
description of the services to be performed by the credit services organization
for the buyer, including:
(I) All guarantees and
all promises of full or partial refunds;
(II) The estimated date
by which the services are to be performed, or the estimated length of time for
performing the services;
(III) A list of the
adverse information appearing on the buyer's credit report that is to be
modified and a description of the precise nature of each modification. A copy
of the consumer's current credit report issued by a consumer credit reporting
agency shall be annexed to the contract with the adverse entries and proposed
modifications clearly marked.
(d) The credit services
organization's principal business address which shall be
the actual office location of the organization and the name and address of its
agent in the state authorized to receive service of process.
(2) The contract shall be accompanied by a completed form in
duplicate, captioned "Notice of Cancellation", that shall be attached
to the contract, shall be easily detachable, and shall contain in bold-faced
type the following statement written in the same language as used in the
contract:
"Notice of Cancellation
You may cancel this contract, without any penalty or obligation,
within five (5) working days from the date the contract is signed.
If you cancel any payment made by you under this contract, it will
be returned within ten (10) days following receipt by the seller of your
cancellation notice.
To cancel this contract, mail or deliver a signed, dated copy of
this cancellation notice, or any other written notice to (name of seller) at
(address of seller)(place of business) not later than midnight (date) .
I hereby cancel this transaction,
(date)
(purchaser's signature) ".
(3) The credit services organization shall give to the buyer a
copy of the completed contract and all other documents the credit services
organization requires the buyer to sign at the time they are signed.
§ 12-14.5-109. Waivers
and exemptions
(1) Any waiver by a buyer of any part of this article is void as
against public policy. Any attempt by a credit services organization to have a
buyer waive rights given by this article is a violation of this article.
(2) In any proceeding involving this article, the burden of
proving an exemption or an exception from a definition is upon the person
claiming it.
§ 12-14.5-110. Criminal
penalties and injunctive relief
(1) Any person who violates any provision of this article commits
a class 1 misdemeanor and shall be punished as provided in section 18-1.3-501, C.R.S.
Violating any provision of this article with respect to any buyer shall
constitute a class 1 public nuisance subject to the provisions of part 3 of
article 13 of title 16, C.R.S.
(2) The administrator of the uniform consumer credit code,
designated pursuant to section 5-6-103, C.R.S.,
or the district attorney of any judicial district may maintain an action to
enjoin violations of this article.
(3) Costs and reasonable attorney fees shall be awarded to the
administrator of the uniform consumer credit code or a district attorney in all
injunctive actions where the administrator of the uniform consumer credit code
or district attorney successfully enforces this article.
§ 12-14.5-110.5. Powers
of administrator of the uniform consumer credit code and district
attorney--subpoenas--hearings
(1) When the administrator of the uniform consumer credit code or
district attorney has cause to believe that any person has violated or is
violating any provision of this article, he may, in addition to the other
powers conferred upon him by this article:
(a) Request such person
to file a statement or report in writing under oath or otherwise, on forms
prescribed by him, as to all facts and circumstances concerning the sale or
advertisement of goods, property, or services by any credit services
organization and any other data and information he deems necessary;
(b) Prior to the filing
of a complaint, issue subpoenas to require the attendance of witnesses or the
production of documents, conduct hearings in aid of any
investigation or inquiry, administer oaths, and examine under oath any person
in connection with the sale or advertisement of goods, property, or services by
any credit services organization.
(2) Service of any notice or subpoena may be made in the manner
prescribed by law or under the
§ 12-14.5-111. Damages
(1) Any buyer injured by a violation of this article or by a
credit services organization's breach of contract subject to this article may
maintain an action in a court of competent jurisdiction for recovery of actual
damages, plus cost of suit and reasonable attorney fees. In case of an action
brought by a buyer, actual damages shall not be less than the amount paid by
the buyer to the credit services organization.
(2) In the event of a willful violation by a credit services
organization of this article or of a contract subject to this article, a person
who is injured thereby shall be awarded, in addition to the damages allowable
under subsection (1) of this section, an additional amount equal to twice the
actual damages awarded under subsection (1) of this section.
(3) Repealed by Laws 2003,
§ 12-14.5-112. Aiding
or assisting violation
Any individual who, as a director, officer, partner, member,
salesperson, agent, or representative of a credit services organization which
violates this article, assists or aids, directly or indirectly, in such
violation shall be responsible therefor and subject to the criminal penalties,
injunctive relief, and damages provided for in section 12-14.5-111 and this section.
§ 12-14.5-113. Remedies
cumulative
The remedies provided for in
this article are cumulative and in addition to any other procedures or remedies
for any violation or conduct provided for in any other law.
Current through laws effective April 26, 2007 including Chapters
1-7, 11-16, 18-21, 24, 25, 27, 29, 30, 33, 38, 41, 43, 45-48, 50, 51, 54, 55,
57-62,64, 66, 67, 69, 72-74, 76-78, 80-82, 85, 89-91, 93, 96, 99, 104, 109,
111, 112, 120,121, 126, 128, 131, 135, 138, 140, 143, 145, 146, 148, 149,
151-155, 160, 162-164, 169, 170, 173, 175-179, as well as Ch. 56, effective May
29, 2007.
END OF DOCUMENT
(C)
2007 Thomson/
Case Law
I
identified no significant cases construing the Act.