Colorado Clarifies Intersection Between Regulation F And State Disclosure Requirement

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On December 20, 2021, the administrator of the Colorado Uniform Consumer Credit Code (an assistant attorney general) released a Advisory opinion clarify the state’s interpretation of the Colorado Fair Debt Collection Practices Act and its intersection with F regulation. Like a handful of other states, Colorado has passed its own FDCPA state law. When describing a debt collector’s obligation to provide validation notices to consumers, the Colorado FDCPA uses almost identical language to the federal Fair Debt Collection Practices Act. Compare 15 USC § 1692g at SNPC §5-16-109 (1). For decades, the collection industry has used the same language – affectionately known as the “g notice” or “validation notice” – to comply with both Colorado law and federal law. Enter the right of the scene: Regulation F, which changed the language of the validation notice and created confusion as to whether the new language offered by the Office Model validation notice complies with Colorado law.

Colorado law and the FDCPA both require that a debt collector, in specific circumstances, explain to consumers. ” . . Unless the consumer, within thirty days of receiving the notice, disputes the validity of the debt, or part of it, the debt will be presumed valid by the debt collector… ” SNPC §516-109 (1), 15 USC § 1692g. To meet this requirement, the decades-old validation notice used by the collections industry repeated this language almost verbatim, that is, “unless you notify this office within 30 days. receipt of such notice that you dispute the validity of that debt or part of it. . . “Regulation F and the Bureau Model validation notice abandons that language in favor of a requirement that debt collectors provide consumers with a specific date at which the consumer’s verification rights expire. The new language of the office is “Call or write to use by [insert specific date], to contest all or part of the claim. If you don’t, we’ll assume our information is correct. This textual change raised legitimate questions about whether the Bureau’s new requirement to provide a specific date (and its corresponding language model) satisfied Colorado’s identical disclosure requirement. If the language of the office did not meet Colorado law, then debt collectors would be required to include different indicate the specific disclosure language on the back of the model validation notice to describe the same consumer rights – undoubtedly causing great confusion among consumers and putting debt collectors at risk of defending civil ligature by citing misrepresentation and deceptive collection practices.

the Advisory opinion corrects confusion. . .most. The Administrator makes it clear that the Colorado and federal FDCPA validation notice disclosure requirements use “nearly identical language.” The notice then confirms that a collection agent or collection agency “may, but is not required to” comply with the requirements of the Colorado Validation Notice “by providing Colorado consumers with the certain date to be. which the validation period of a consumer ends, if this certain date is consistent with the validation period as defined in Regulation F. Attempting to comfort the collection agents, the Administrator confirms that no regulatory action will be taken. taken against a collection agency or collection agent who uses a certain date to meet their obligation to provide a notice of a consumer’s right to dispute within “30 days of receipt of notice. “This advisory opinion provides additional legal certainty to those who rely on it because Colorado law, like federal law, provides a safe haven from legal liability for those who in good faith rely on the advice and rely on it. conform to their behavior in accordance with it. SNPC § 5-16-113 (6).

If public opinion had stopped there, the rule would be clear, and consumers and debt collectors would bear the corresponding expectations. . . but this is not the case. Instead, the Administrator felt compelled to add an “Illustration” at the end of the opinion in an attempt to demonstrate an application of the opinion to a specific fact model. In racing parlance, this is where “the rear loosens a bit”. Here is the complete illustration:

Drawing:

In connection with the collection of a debt, a collection agency provides a Colorado consumer with written notice. As required by Reg. F, the first page of the notice advises the consumer that he has until April 24, 2022 to contest the validity of the claim. On the second page (or the back of the first page) of the notice, the collection agency again provides the consumer with [sic] with a deadline of April 24, 2022 to contest the validity of the claim and, in addition, provide the consumer with the information required by the article 5-16-109 (1), CRS, and 4 RCC 903-1, rule 2.01. The debt collector complied with section 5-16-109 (1), CRS, and 4 CCR 903-1, rule 2.01. This written disclosure may also contain the disclosures required by article 5-16-105 (3) (c) and (d), CRS

Despite this clumsy application, the illustration confirms a very narrow and specific question: giving the consumer a certain date meets Colorado’s requirement to explain that consumers have 30 days to dispute the validity of the debt (as long as the date is complies with the requirements of regulation F). Repeating this date on the back of the pattern validation notice also complies with Colorado law. Unfortunately, the review does not not specifically answer the question whether the other requirements of SNPC §5-16-109 (1) (i.e. amount of debt, identification of creditor, obtaining copies of verification or judgment, original requests for creditor information) that reflect 15 USC §1692g are also satisfied with the Bureau’s new model validation notice language. For the Administrator to recognize early on the view that the language of the FDCPA and Colorado law uses “nearly identical language”, this author can only answer the question in the affirmative – but he would have been well advised. as the opinion explains in more detail. clear terms.

Conclusion: This notice confirms that using a certain date to describe the end of the validation period is consistent with Colorado’s requirement to explain that consumers have 30 days to dispute the validity of the debt. For collectors seeking to take advantage of the Regulatory F Safe Harbor afforded by the Pattern Validation Notice, disclosures specific to Colorado law (i.e. not also required by the FDCPA) will appear at reverse side (not on a second page) of the template validation notice as permitted optional disclosures. 12 CFR. §1006.34 (d) (3) (iv)


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