Credit & Lending

Advance Fee Loans

Under Colorado law, it is illegal for any person serving as a lender, or holding himself out as capable of obtaining a loan, to charge or collect any fee from a borrower until a borrower actually receives the agreed-upon loan. There are several exceptions to this law. First, a borrower may pay for a credit check or for an appraisal of security for the loan where such payment is by check or money order made payable to a party independent of the loan finder. Second, the following persons are exempt from this law:

  • A supervised financial organization, as defined in the Uniform Consumer Credit Code (5-1-301(45), C.R.S.), and its employees, when acting within the scope of their employment;
  • A person duly licensed to make supervised loans under the Uniform Consumer Credit Code.
  • A business development corporation created pursuant to article 48 of title 7, C.R.S.
  • A pawnbroker licensed pursuant to article 56 of title 12, C.R.S.
  • Any governmental entity or employee thereof, acting in his official capacity.
  • A mortgage broker defined as any person who, directly or indirectly, serves or offers to serve as an agent for any person to obtain a loan secured by a mortgage, deed of trust, or lien on real property.

Direct mail or telephone calls purporting to make available low-cost or other loans in exchange for an advance payment of any kind should be carefully scrutinized. Many foreign telemarketing schemes use promises of low-cost loans to defraud consumers into making large advance payments.

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Bad Checks

 Any person, knowing he has insufficient funds in their checking account, who, with intent to defraud, writes a check for the payment of services, wages, salary, commissions, labor, rent, money, property, or other thing of value, commits fraud by check. C.R.S.,18-5-205(2). The penalty for writing a fraudulent check is a class 3 misdemeanor if the value of the check is less than $100. The penalty can be as high as a class 6 felony if the value of the check is worth more than five hundred dollars, if the offender is convicted of fraud by check involving the issuance of two or more checks within any sixty-day period in the State of Colorado totaling five hundred dollars or more in the aggregate, if the offender has been twice previously convicted under this section or a former statute of this state of similar content and purport, or if the fraudulent check was drawn on an account which did not exist or which has been closed for a period of thirty days or more prior to the issuance of said check.

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Bankruptcy

U.S. Bankruptcy Court
US Customs House
721 19th Street
Denver, CO 80202
Phone: (720) 904-7300

The Colorado Bar Association has presented free public seminars on bankruptcy and foreclosure in the past. Consumers who are interested in learning more about the bankruptcy laws should contact the Colorado Bar Association at (303) 860-1115 or 1-800-332-6736 (in Colorado).

There are five main chapters under the U.S. Bankruptcy Code:

  • Chapter 7: A portion of the debtor's assets is liquidated and distributed among creditors by a court-appointed trustee.
  • Chapter 9: Applies only to municipalities.
  • Chapter 11: Reorganization plan for businesses. Business may continue operating under repayment plan.
  • Chapter 12: Protection for family farmers as they work their way out of debt.
  • Chapter 13: Debt-protection action for individuals who need to repay their debts from current assets and income.

Note: The US Congress significantly changed the law regarding personal bankruptcy filings in 2005. See PUBLIC LAW 109–8 (April 20, 2005), the so-called “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.” You should consult with a private attorney experienced in bankruptcy law and procedure to understand your rights and remedies under this relatively new Act.

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Banks 

Where you should file a complaint about a bank depends on the type of bank the complaint concerns. If you don’t know the type of bank you are dealing with or you cannot figure out what agency regulates the bank in question, access the Federal Reserve's consumer complaint resources at: http://www.federalreserveconsumerhelp.gov/?District=6.

General information about filing a consumer complaint against a bank can be found at http://www.federalreserve.gov/pubs/complaints. Information about filing a complaint against a state-charted bank can be found at the Consumer Action website, http://www.consumeraction.gov/banking.shtml.

Here is some general information about contacting the various bank-regulating agencies:

State Banks

A. State chartered and Industrial banks:

Colorado Division of Banking
1560 Broadway, Suite 975
Denver, CO 80202
Phone: (303) 894-7575
Fax: (303) 894-7570

B. State credit unions or state savings and loans:

The Colorado Division of Financial Services
1560 Broadway, Suite 950
Denver, CO 80202
Phone: (303) 894-2336
Fax (303) 894-7886

Federal or nationally chartered banks

A. Nationally chartered banks:

Office of the Comptroller of the Currency, Customer Assistance Group
1301 McKinney Street, Suite 3450
Houston, TX 77010
Phone: 1-800-613-6743
Fax: (713) 336-4301
E-mail: Customer.Assistance@occ.treas.gov.

B. If the institution is not listed under state chartered savings and loans, or state chartered credit unions, and the title of the institution include the words, “Federal Savings Bank,” or “FSB” in its name, then contact the following federal regulator:

Office of Thrift Supervision
West Region
Consumer Affairs
P.O. Box 7165
San Francisco, CA 94120
Phone: (650) 746-7000
Fax: (650) 746-7001

However, one federally-chartered savings and loans operating in Colorado is regulated by different regional offices of the Office of Thrift Supervision, as follows

For Liberty Savings Bank, contact:

Office of Thrift Supervision
Harborside Financial Center Plaza Five, Suite 1600
Jersey City, NJ 07311
Phone: (201) 413-1000

C. Federal credit unions:

National Credit Union Administration
Region V - Tempe
1230 W. Washington Street, Suite 301
Tempe, AZ 85281
Phone: (602) 302-6000
Fax: (602) 302-6024 

D. FDIC insured banks (these are chartered banks that are not members of the Federal Reserve System):

Dallas Regional Office (covers Colorado)
1910 Pacific Avenue, 20th Floor
Dallas, TX 75201-4586
Phone: 1-800-568-9161

FDIC Consumer Response Center
2345 Grand Boulevard, Suite 100
Kansas City, MO 64108
Phone: 1-877-275-3342
Fax: (816) 234-9060
E-mail: consumeralerts@fdic.gov

The FDIC also handles bank closures.

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Collection Agencies

Colorado Collection Agency Board

Ralph L. Carr Colorado Judicial Center
1300 Broadway, 6th Floor
Denver, CO 80203
Phone (licensing): (720) 508-6020
Phone (consumer complaints and information): (720) 508-6022
Fax: (720) 508-6033
E-mail: cab@state.co.us

This agency handles complaints against collection agencies that are operating in violation of the Colorado Fair Debt Collection Practices Act. This is a state law that governs the actions of debt collectors and collection agencies. The law prohibits collection agencies from using certain practices to collect the debt as well as unnecessary disclosure of the debt to parties that are not obligated to pay the debt. This law generally does not apply to creditors collecting their own debt.

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Consumer Credit Counseling

Consumer Credit Counseling Services is a nationwide non-profit organization providing financial education, quality credit counseling, and debt management services. To make an appointment at one of their Colorado offices, call 1-800-388-2227 or visit the National Foundation for Credit Counseling at www.nfcc.org.

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Credit Cards

If a credit card is issued by a Colorado company, bank, or credit union, those cards must comply with the Colorado Uniform Consumer Credit Code. Complaints about such credit cards can be filed with:

Office of the Attorney General
Uniform Consumer Credit Code (UCCC)
1300 Broadway, 6th Floor
Denver, CO 80203
Phone: (720) 508-6012
Fax: (720) 508-6033
Website: www.coloradoattorneygeneral.gov

Most credit cards are issued by national banks located in other states. Complaints about such credit cards will usually be handled by:

Office of the Comptroller of the Currency
Customer Assistance Group
1301 McKinney Street, Suite 3450
Houston, TX 77010
Phone: 1-800-613-6743
Fax: (713) 336-4301
Website: http://www.occ.treas.gov/customer.htm
E-mail: Customer.Assistance@occ.treas.gov.

Never give your credit card number over the phone unless you have originated the call to a reputable business.

Two common problems in this area involve the massive amounts of mail consumers receive offering credit cards through the mail. The rule of thumb here is to read the fine print. The use of a card may be listed as free, while the interest rate is high; or it is free the first year and then rises to a very high interest rate or a large annual fee.

Consumers should be extremely wary of any offer made over the phone. If the company cannot provide free written information – forget it.

Should you receive unauthorized charges on your bill, or you wish to dispute an item, follow the instructions for filing a written complaint which are outlined on the back of the bill. Disputes must be registered in writing within 60 days.

Credit cards can be a good way of paying for goods or services when it involves a large amount of money and most credit card companies will assist consumers with legitimate complaints.

Colorado prohibits merchants from imposing a surcharge on credit transactions. “A surcharge is any additional amount imposed at the time of the sales or lease transaction by the merchant, seller, or lessor that increases the charge to the buyer or lessee for the privilege of using a credit or charge card.” C.R.S. 5-2-212(1)

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Credit Card Receipts

Businesses that accept credit cards for the transaction of business cannot print more than the last five digits of the credit account number, or print the expiration date, on either the cardholder's receipt or the receipt retained by the business. This applies to receipts that are electronically printed only, not those that are handwritten or done by imprint of the credit card. See C.R.S. 6-1-711. To file a consumer complaint either call 1-800-222-4444 or use our online consumer complaint form.

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Credit Card Surcharges

Under Colorado law (C.R.S. § 5-2-212), it is illegal for any merchant to impose a surcharge on a purchaser or lessee who elects to use a credit or charge card in lieu of payment by cash, check, or similar means.  A surcharge is any additional amount imposed at the time of the sales or lease transaction by the merchant, seller, or lessor that increases the charge to the purchaser or lessee for the privilege of using a credit or charge card and includes those cards pursuant to which unpaid balances are payable on demand.  This prohibition does NOT apply to convenience fees charged by a state or local government entity which accepts payment by credit or charge card

This prohibition on surcharges does NOT apply to debit cards.

A discount offered by a seller or lessor for the purpose of inducing payment by cash, check, or other means not involving the use of a seller or lender credit card does NOT constitute a finance charge if such discount is offered to all prospective purchasers and its availability is disclosed to all prospective purchasers clearly and conspicuously.

 


 

Credit Repair Agencies

Office of the Attorney General
Uniform Consumer Credit Code (UCCC)
1300 Broadway, 6th Floor
Denver, CO 80203
Phone: (720) 508-6012
Fax: (720) 508-6033

The Uniform Consumer Credit Code Unit of the Attorney General’s Office regulates credit repair agencies.

A credit repair agency is any person or business that, for a fee, advertises or claims they can improve your credit record or report.

Some companies charge money to correct or erase bad credit. Bad credit, if correct, cannot be legally removed from your credit report. Consumers can correct their own credit report at no cost by contacting the credit reporting agencies. See C.R.S. 12-14.5-101. See also “Credit Reports” in this Reference Guide.

Credit Repair Laws

The Colorado Credit Services Organization Act was adopted to provide consumers with information necessary to make an intelligent decision regarding the purchase of credit repair services and protect the public from unfair or deceptive advertising and business practices. If you are tempted to use a credit repair company, make sure that the company is complying with the law.

Before you sign a credit repair agreement, the credit repair company must disclose to you in writing:

  • How you can correct your credit report yourself under Colorado and federal law;
  • Your right to cancel the agreement for any reason within five working days (a detachable cancellation form must be included);
  • The total fee, conditions of payments, and a full and detailed description of the services to be performed; and
  • A copy of your credit report, with the incorrect information indicated.
    Note: The Federal Telemarketing Rule prohibits credit repair companies from collecting any advance fees other than those connected with the cost of obtaining credit reports.

Consumers should beware of the following credit repair practices:

  • Promises to remove any negative information or bankruptcies from your credit report. This will occur only through the passage of time. Credit repair companies may be able to temporarily delete information, but once it is re-verified, it may again appear on your credit report.
  • Requests for advance payment for services, including by post-dated checks. This is illegal under federal law and it is difficult to recover any money paid in advance.
  • Promises to improve your credit standing by showing you how to obtain and use a tax identification number or a false social security number in place of your actual social security number. This may be illegal.

Some other reminders:

  • You can correct any error in your credit report yourself, without paying a fee, by contacting the credit bureaus directly.
  • Do not pay advance fees to a credit repair company.
  • Do not contract with or send money to an out of state credit repair company. Because it is difficult to enforce Colorado law against out of state companies, it may be impossible to recover your money if problems arise.
  • If you decide to use a credit repair company, keep a record of all payments you make by keeping the canceled checks, or getting receipts for payments by cash or money order.

How consumers should handle credit and debt collection problems generally:

If bad credit is affecting your ability to obtain credit, try to negotiate with your creditors to accept smaller payments or waive interest. Consult a credit counseling service or an attorney for help in negotiating with creditors. Follow all payment arrangements. Call or write your creditors, if you have to pay late.

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Credit Reports

A credit report is a report compiled and issued by a consumer reporting agency which lists activity which may affect your credit standing, including your creditors, the amount of your debts, your credit limits, late payments, defaults, charge-offs, repossessions and bankruptcies. Consumers can call one of the following consumer reporting agencies to correct inaccurate information in their credit file or to obtain other information about their credit history:

EquiFax Credit Information Services
P.O. Box 740241
Atlanta, GA 30374
(800) 685-1111 (credit report)
A toll-free number for filing disputes is listed only on credit reports.
Website: www.equiFax.com

Experian
P.O. Box 949
Allen, TX 75013
(888) 397-3742 (credit report)
(888) 397-3742 (dispute)
Website: www.experian.com

Trans Union Corp.
P.O. Box 6790
Fullerton, CA 92834
(877) 322-8228 (credit report)
(800) 916-8800 (dispute)
Website: www.tuc.com

Free Credit Reports

Under a federal law that went into effect for Colorado in December 2004, consumers are entitled to receive, upon request, one free copy of their credit report every year from each consumer reporting agency. To obtain your free reports you must make a request on-line at www.annualcreditreport.com or by calling 1-877-322-8228. Or, you can mail a completed Annual Credit Report Request Form to:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

Warning – be aware of sound-a-like offers of a “free” credit report. The information listed above is the only official way to obtain your free annual credit reports. Many companies will try and entice you with a free report in order to hook you into expensive credit repair, credit monitoring or identity theft protection products. They may offer a “free trial” of these products only to automatically debit your bank or credit card for a full annual fee unless you cancel in time. Some companies may simply be trying to trick you into providing personal identifying (social security number, birth dates, etc.) or financial (bank or credit card numbers) information. Do not respond to unsolicited e-mail messages or pop-up ads for free credit reports – the credit reporting agencies listed above will NEVER try and contact you in this way.

Other Reasons You May Request a Free Report

Under federal law, you're entitled to a free report if a company takes adverse action against you such as denying your application for credit, insurance, or employment and you ask for your report within 60 days of receiving notice of the action. The notice will give you the name, address, and phone number of the consumer reporting company. You're also entitled to one free report a year if you're unemployed and plan to look for a job within 60 days; if you're on welfare; or if your report is inaccurate because of fraud, including identity theft. Otherwise, a consumer reporting company may charge you up to $9.50 for another copy of your report within a 12-month period.

Colorado Security Freeze Option

Under Colo. Rev. Stats. 12-14.3-106.6, consumers have the option of requesting any consumer reporting agency to place a security freeze on the consumer’s credit report. That freeze prohibits that credit reporting agency from releasing the credit report or on any information contained in that report. A consumer can place a security freeze on his or her credit report by making a request in writing by certified mail to the consumer reporting agency. Once that security freeze is in place, the consumer reporting agency cannot release that report or information contained in that report without the prior express authorization from the consumer.

The consumer reporting agency must place a security freeze on a consumer’s credit report within 5 business days after receiving the request from the consumer. If a consumer wants to remove the security freeze on his or her credit report, the consumer must request that the freeze be temporarily lifted and provide the following:

  • Proper identification;
  • The unique personal identification number and password provided by the consumer reporting agency; and
  • The proper information regarding the third party who is to receive the credit report or the time period that the report shall be available.

The consumer reporting agency shall remove a security freeze within three business days of receiving a request for removal from the consumer. A credit reporting agency cannot charge for the initial placement of a security freeze. However, it may charge up to $10 for the temporary or permanent removal of a security freeze and for the reinstitution of a security freeze after it has been permanently removed.

Note: A security freeze placed on a consumer’s credit report will NOT block access to that report, or to the information contained in that report from any of the following:

  • Any person that owns a financial obligation owing by the consumer for the purposes of reviewing the account or collecting that financial obligation;
  • An assignee or prospective assignee of a financial obligation owing by the consumer;
  • A subsidiary, affiliate, agent, assignee or a prospective assignee of a person to whom access to a consumer’s credit report has been granted for the purpose of facilitating the extension of credit or other permissible use;
  • A state or local agency, law enforcement, trial court, private collection agency, or person acting pursuant to a court order, warrant, or subpoena authorizing the use of the credit report;
  • A child support enforcement agency enforcing a child support obligation;
  • The Colorado Department of Health Care Policy and Financing acting to investigate fraud;
  • The Colorado Department of Human Service acting to investigate fraud;
  • The Colorado Department of Revenue acting to investigate or collect delinquent taxes or unpaid court orders;
  • The use of credit information for the purpose of prescreening as provided by the “Fair Credit Reporting Act,” 15 U.S.C. 1681;
  • Any person or entity administering a credit file monitoring subscription service to which the consumer has subscribed;
  • Any person or entity for the purpose of providing a consumer with a copy of his or her credit report upon the consumer’s request;
  • Any person or entity for use in setting or adjusting a rate, adjusting a claim, or underwriting for insurance purposes;
  • A pension plan acting to determine the consumer’s eligibility for plan benefits or payments authorized by law to investigate fraud;
  • A person conducting a pre-sentence investigation in a criminal matter or a probation officer using this information for supervision of an offender;
  • A collection investigator engaged in the collecting of fees, fines, or restitution in a court proceeding;
  • A licensed hospital with which the consumer has or had a contract, or a debtor-creditor relationship for the purpose of reviewing the account or collecting the financial obligation owing on the account; or
  • A law enforcement agency acting to investigate a crime or conducting a criminal background check.

Opting out of credit card offers

If you do not want to receive unsolicited credit offers based on your credit report, contact the credit bureaus individually or call 1-888-567-8688. This number is only good for removing information from Experian, EquiFax, and TransUnion. For any other credit bureaus, consumers will have to look up their number and call them individually.

Credit Bureau Problems

If a credit bureau is violating your rights under the Fair Credit Reporting Act, or if you are having problems with your credit report, contact:

The Federal Trade Commission
Consumer Response Center
600 Pennsylvania Avenue, NW
Washington, DC, 20580
Phone: (877)-FTC-HELP

The Federal Fair Credit Reporting Act and Colorado Consumer Credit Reporting Act regulate what information appears on your credit report, how long information stays on your credit report, and how you can correct any errors in the report. You can get a copy of your credit report, and information on how to correct the report, from any credit reporting agency. Colorado law requires credit reporting agencies to provide you with one free copy of your credit report each year upon your request (see “Free Credit Reports” above). In addition, a credit reporting agency must send you a notice once a year if negative information was added to your credit report or if there were eight or more inquiries on your credit report. An inquiry occurs when a creditor reviews your credit report because you applied for credit or a creditor wants to offer you a credit product.

To receive a copy of your credit report, credit reporting agencies typically request your full name, address, social security number, date of birth, place of employment, and a copy of your driver's license. The credit reporting agencies already possess most of this information, as reported by your creditors, but need you to verify it to make certain they provide you with the correct report.

If you are denied credit based on the contents of a credit report, the creditor must give you the name and address of the credit reporting agency that provided the report. If you contact the credit reporting agency within 60 days after the creditor's notification, the credit reporting agency must provide a free copy of your credit report.

After receiving your credit report, you should do the following:

  • Review the credit report for inaccurate information. If you find a mistake or error, write to the credit reporting agency, explain the problem, and request the correction of your report. Include copies of canceled checks, receipts, or other documents to verify payment or identification with the correction request.
  • Contact your creditors directly, to ensure that their records are correct. This may be another way to correct inaccurate information on your credit report.
  • Remember that credit reporting agencies must remove accurate information after seven years and bankruptcies after ten years. Otherwise, credit reporting agencies do not have to remove accurate information, no matter how negative.
  • When a credit reporting agency receives your correction request, it must investigate and remove or correct any inaccurate information that is not verified within a reasonable period of time, usually 30 days. Note: A credit reporting agency may ignore frivolous correction requests.
  • At your request, the credit reporting agency will send a corrected copy of your report to anyone who received the incorrect version within the past six months.
  • If, after the investigation, you are not satisfied, you can file an explanation with the credit reporting agency that will become part of your credit report.

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Credit Scores

Your “credit score” generally refers to one method that lenders utilize to assess whether and at what cost to extend credit to you. Relying principally on information contained in your credit report (see “Credit Reports” in this Resource Guide), lenders will use a statistical model to compare your credit history with the credit histories of similar consumers. Their goal is to determine statistically which consumers are most likely to repay a loan on time and which are most likely to default. The higher your credit score, the greater your chances are of receiving a desirable loan at a low cost (i.e., at a lower interest rate). Generally, credit scores range from a low of 300 to a high of 850, with the median score in the United States at 723.

According to the most widely recognized credit scoring model, developed by the Fair Isaac Corporation (known as a FICO score), the following categories of information make up your credit score, in order of significance:

  • Payment history (35%), including delinquent payments, bankruptcies, judgments, liens and collections on past due accounts
  • Amounts owed (30%) on various accounts, including the type and number of accounts
  • Length of credit history (15%)
  • New credit (10%), including the number of recently opened accounts, and proportion of accounts that are recently opened, by type of account
  • Types of credit used (10%) including credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.

For more information on FICO scores, visit www.myfico.com/CreditEducation.

Credit scores do not take into consideration gender, race, religion, marital status or national origin.

It is difficult to improve your credit score significantly in a short period of time. Be cautious of unsolicited e-mails or Internet sites that promise to fix your credit “overnight.” Some basic tips on improving your credit score over the long term include:

  • If you have no or little credit, establish some. Don’t apply for multiple credit cards, but select one credit card you can afford and use it wisely.
  • Pay off all outstanding loans or credit accounts on a timely basis. Try and avoid making minimum or “interest only” payments.
  • Keep your credit card balances low, or paid off. If you are “maxed out” on your credit cards, lenders will become suspicious about your financial stability.
  • Check your credit report on a regular basis and challenge any incorrect information that you find. See “Credit Reports” in this Resource Guide for more information on obtaining your credit report and challenging incorrect information.

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Debt Collection

Colorado Collection Agency Board
1300 Broadway, 6th Floor
Denver, CO 80203
Phone: (720) 508-6020
Phone (Consumer complaints): (720) 508-6022
Fax: (720) 508-6033

One of the most common problems concerning debt collection is harassment by a collection agency. The debt collector may not contact the consumer if the consumer sends a letter telling the debt collector to stop except to say there will be no further contact or to notify the consumer that the debt collector or the creditor intends to take some specific action. Sending such a letter to a collector does not m ake the debt go away if the consumer actually owes it. Collection agencies also may not threaten or harass and complaints should be directed to the Collection Agency Board. See “Collection Agencies” in this Resource Guide.

A brochure on the Fair Debt Collection Practices Act is available from the Federal Trade Commission at http://www.ftc.gov/bcp/conline/pubs/credit/fdc.htm and at the Colorado Collection Agency Board (“CAB”) website listed above.

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Debt Settlement Companies

Office of the Attorney General
Uniform Consumer Credit Code (UCCC)
1300 Broadway, 6th Floor
Denver, CO 80203
Phone: (720) 508-6012
Fax: (720) 508-6033

The Uniform Consumer Credit Code Unit of the Attorney General's Office regulates debt-management services.

A debt-management service is a service that acts as an intermediary between an individual and one or more creditors of the individual for the purpose of obtaining concessions.

After January, 2008, all debt-management service providers that agree to provide debt-management services to a person which they should reasonably know resides in Colorado must be registered with the Uniform Consumer Credit Code Unit under Colo. Rev. Stats. § § 12-14.5-201, et.seq. Registration will be public record. In addition, after January 2008, all registered debt-management service providers must be bonded or have proof of insurance.

Debt-Management Service Laws

Before providing debt-management services, a registered provider must give you an itemized list of goods and services and the charges for each. The list must be clear and conspicuous, be in a format you may keep, and describe the goods and services the provider offers.

A provider must also first provide you with an education about the management of personal finance, prepare a financial analysis, and provide you with a suitable payment plan, if applicable. The materials must include a list of the creditors and whether they will participate in the plan of grant concessions.

A provider is further obligated to give you a separate disclosure including the name and business address of the provider, a notice that debt-management plans may adversely affect your credit rating or score, that plans are not suitable for everyone and there are other avenues you should ask about, that the provider may receive compensation from the creditors, and that settlement of debt may result in taxable income to you.

Until you have signed and entered into an agreement with a provider, the provider may not impose fees and charges for debt-management services. The law makes further requirements on providers with regards to fees as outlined under Colo. Rev. Stats. § 12-14.5-223.

You may cancel an agreement with a provider before midnight of the third business day after you assent to it. If a provider is not properly registered at the time you enter into an agreement, that agreement is voidable by you.

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Foreclosure

As a residential homeowner, you have specific rights and remedies if your home is facing foreclosure. THIS SECTION PROVIDES SOME GENERAL INFORMATION ONLY. YOU MAY HAVE ADDITIONAL OR DIFFERENT RIGHTS OR REMEDIES UNDER COLORADO LAW. YOU SHOULD ALWAYS CONSULT WITH A PRIVATE ATTORNEY AND CONTACT THE COLORADO FORECLOSURE HOTLINE (1-877-601-HOPE). 

Foreclosure process 

If you borrowed money to purchase your home, refinance an existing mortgage, or to access the equity in your home (for example, for home improvements), those loans are probably secured by a document called a “Deed of Trust.” In Colorado, deeds of trust typically name as trustee the “Public Trustee” (this is a government office) of the county in which your home is located. If you are in default on your mortgage, your lender may commence proceedings to sell your home to pay off their loan. This procedure is known as a “foreclosure” and involves the following general steps:

  • At least 30 days after default on your mortgage, and at least 30 days before commencing a foreclosure on your home, your lender must mail you a notice containing the telephone number of the Colorado Foreclosure Hotline (1-877-601-HOPE) and the direct telephone number of the lender’s loss mitigation representative or department. “Loss mitigation” is where you try and work out some modification to your mortgage in order to avoid a foreclosure. 
  • At least 30 days after mailing this notice, the lender may file with the Public Trustee a document that is called “Notice of Election and Demand” along with other documents described in §38-38-101 of the Colorado Revised Statutes. The Public Trustee must record this Notice of Election and Demand with the county Clerk and Recorder within 10 days after it is filed in her office.
  • Within 20 calendar days of the recording of the Notice of Election and Demand, the Public Trustee must mail you a combined notice containing, among things, the date of the sale, the amount of the outstanding principal balance of the mortgage as of the date of the Notice of Election and Demand and a statement that a notice of intent to cure must be filed with the Public Trustee at least 15 days prior to the first scheduled sale date or any date to which the sale is continued. See "Your Right to Cure" below. A second notice containing this information must be mailed to you between no more than 60 calendar days nor less than 45 calendar days prior to the first scheduled date of sale. 
  • The Public Trustee must publish in a local newspaper of general circulation (one that comes out at least once a week) a “Notice of Sale” indicating the actual date, time and place when your property will be sold. The date of sale must be not less than 110 days nor more than 125 calendar days from when the Notice of Election and Demand was recorded.  If all of the property is agricultural, the date of the sale must be not less than 215 calendar days nor more than 230 calendar days from when the Notice of Election and Demand was recorded.
  •   Before your property can be sold, the lender must obtain a court order authorizing the sale. That is accomplished by filing a verified motion with a district court in your county and setting a hearing on that motion. The lender must give you written notice of that hearing not less than 15 days before that hearing date. IF YOU WANT TO CONTEST WHETHER A DEFAULT HAS OCCURRED, OR WHETHER YOUR LENDER IS ENTITLED UNDER YOUR DEED OF TRUST TO SELL YOUR PROPERTY, YOU MUST FILE A WRITTEN RESPONSE TO THE LENDER’S MOTION AT LEAST 5 DAYS BEFORE THE SCHEDULED HEARING. 

Your Right to Cure 

You have a right to cure the default on your loan at any time up to 15 calendar days before the date set for the foreclosure sale of your property. You must file a written Notice of Intent to Cure with the Public Trustee. The Public Trustee will determine the amount you are required to pay to cure the default (this amount can include missed payments, interest, costs of the foreclosure and attorney fees). You must pay this amount on or before 12:00 noon on the day before the foreclosure sale date.

Foreclosure Relief Scams 

Once you are delinquent or in default on your mortgage, you may start getting contacted by various companies and individuals seeking to “assist” you with your loan or to help you avoid foreclosure. BE EXTREMELY CAREFUL ABOUT DEALING WITH ANYONE PROMISING THAT THEY CAN “SAVE YOUR HOME FROM FORECLOSURE” OR SIMILAR COME-ONS.  

The Colorado Foreclosure Protection Act, §§ 6-1-101-1120, C.R.S., applies to any contract between a homeowner and a Foreclosure Consultant who offers to stop or prevent a foreclosure sale for a fee. The law prohibits a Foreclosure Consultant from charging or collecting any money from the homeowner BEFORE their services have been completed. It is a criminal offense to violate this law.

Many people try to take advantage of people in a desperate situation caused by a foreclosure. Rather than trying to help you, however, too many of these people are simply looking to steal the equity you have built up in your home. Common scams include:

  • Extremely high cost and short term (balloon) loans secured by a second mortgage on your home to allow you to cure your current default. Usually, you have no real ability to pay off this loan.
  • There are a variety of scams in which the consumer is convinced (or misled) to convey title of his or her property to the individual who is “rescuing” him or her from foreclosure. The consumer is left with a lease or option to “repurchase” his or her home, often on terms that are even more onerous than the loan on which he or she originally defaulted. The consumer is soon evicted from the home and his or her rescuer ends up with all of the equity.

Consumers (especially non-English proficient) are asked to falsify loan application and other documents to misrepresent either the value of their home or their employment/income in order to qualify for a loan. Of course, they then have no real ability to repay that loan and soon find themselves in foreclosure.

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Mortgage Brokers

Mortgage brokers are regulated by the Division of Real Estate within the Colorado Department of Regulatory Agencies. Effective January 1, 2007, mortgage brokers were required to register with the Division before engaging in business. That registration required submission of a criminal background check and maintenance of a surety bond in the amount of $25,000. Current resgitration status can be reviewed at http://eservices.psiexams.com/crec/search.jsp.

Effective January 1, 2008, all mortgage brokers will have to be licensed to do business in Colorado. In addition to a criminal background check and the posting of a $25,000 surety bond, mortgage brokers will also have to complete certain education requirements, pass a written examination, and maintain errors & omission insurance. All of these requirements will be the subject of rule making by the Division of Real Estate in late 2007.

Further information about mortgage brokers and mortgage broker registration and/or licensing can be obtained from:

Colorado Division of Real Estate
1900 Grant Street, Suite 600
Denver, CO 80203
Phone: (303) 894-2166 or 2185
Fax: (303) 894-2683

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Lost or Misused Bankcard

Under the federal Electronic Funds Transfer Act (15 U.S.C. 1693), a consumer’s liability for unauthorized charges on a lost or stolen credit card are limited to the lesser of $50 or the amount of money or value of property or services obtained in such unauthorized electronic fund transfer. However, in order to have your liability limited in this fashion, you must notify the bank of the lost or stolen bank card within two days after the consumer learned of the loss of the card. If you give the bank notice later than two days but before 60 days, you liability may be limited to $500.

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Mortgages

First mortgages and refinances of first mortgages are not regulated in Colorado. If you have a problem with a mortgage loan, you may contact the following associations:

Colorado Association of Mortgage Brokers
7000 Broadway, Suite 320
Denver, CO 80221
Phone: (303) 991-2240
Fax: (303) 991-2241 
E-mail: info@camb.org

Colorado Mortgage Lenders Association
7000 East Belleview Ave., Suite 203
Greenwood Village, CO 80111
Phone: (303) 773-9565, ext. 4
Phone: 1-800-611-4832, ext. 4
(leave a message that will be returned w/in 24 hours)
Fax: (303) 773-8746

If your complaint concerns a second mortgage, home equity loan, or similar types of loans, you should contact:

Attorney General’s Office
Uniform Consumer Credit Code (UCCC)
1300 Broadway, 6th Floor
Denver, CO 80203
Phone (Consumer complaints and general information): (720) 508-6012
Phone (Supervised Lending Licensing): (720) 508-6010
Fax: (720) 508-6033

See “Mortgage Brokers” in this Resource Guide.

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Predatory Lending

"Predatory lending” generally refers to mortgage brokers and lenders placing consumers in loan products with significantly worse terms and/or higher costs than loans offered to similarly qualified consumers in the region. This may also include the refinancing of existing loans with a new loan that provides no tangible benefit to the consumer. These abuses include extremely high fees, costly (and, often, unnecessary) insurance policies, large balloon payments, high interest rates and frequent refinancing (loan "flipping"). However, not every high-cost or “sub-prime” loan is predatory. Predatory lending also includes any unfair or unconscionable lending practices, including use of false advertising or other misrepresentations in connection with a loan transaction.

Colorado Consumer Equity Protection Act

Modeled in part after the federal “Homeowner Equity Protection Act,” this Colorado statute addresses certain high-cost or “predatory practices. The Act applies only to refinancing of first mortgages and second mortgages where either the interest rate is more than 8 points over comparable US Treasury securities or where loan costs exceed the greater of 6% of total loan amount or approximately $625. For loans covered by this Act, prepayment penalties are limited to the first five years of the loan, balloon payments are allowed only for loans longer than five years, default interest rates are prohibited, and other common practices (such as loan, credit insurance, advance payments, and negative amortization) are prohibited or significantly limited.

Deceptive practices by loan originators, mortgage brokers, or lenders may also violate the Colorado Consumer Protection Act. The Consumer Protection Section of the Attorney General’s Office will also take complaints. To file a consumer complaint either call 1-800-222-4444 or use our online consumer complaint form.

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Rent-to-Own

 The Uniform Consumer Credit Code Unit of the Attorney General’s Office regulates businesses allowing you to rent goods and electronics by the week or month with an option to buy the item at the end of the contract. Consumers can call (720) 508-6012 for assistance with this. See C.R.S. 5-10-101 .

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Uniform Consumer Credit Code

Uniform Consumer Credit Code (UCCC)
Office of the Attorney General
1300 Broadway, 7th Floor
Denver, CO 80203
Phone: (720) 508-6012 – Consumer complaints and general information
Phone: (720) 508-6010 - Supervised Lender Licensing
Fax: (720) 508-6033
E-mail: uccc@state.co.us

The Colorado Uniform Consumer Credit Code is a state law that regulates the terms and conditions of certain consumer credit in the State of Colorado. However, the UCCC does not cover first mortgage home acquisition loans or refinances of acquisition loans. With respect to the consumer loans it does cover, the UCCC sets maximum rates and charges for some fees, requires disclosure of the cost of credit so consumers may shop for the best rates, and provides remedies for consumers in default.

The UCCC also covers deferred deposit loans (commonly referred to as “pay-day” loans). The Office of the Attorney General, through the administrator of the Uniform Consumer Credit Code, monitors and investigates complaints filed against lenders and creditors.

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