Colorado Issues Opinion Clearing Up Disclosure Conflict With Reg F

One of the problems that companies in the accounts receivable management industry had as they prepped for the enactment of Regulation F was conflicts with state laws regarding disclosures that needed to be included in certain locations on letters and notices sent to consumers. One state in particular — Colorado — has a provision in its Colorado Fair Debt Collection Practices Act that required a disclosure stating a consumer had 30 days after receipt of the notice to dispute the validity of a debt. While lining up with what was included in the Fair Debt Collection Practices Act, the Colorado disclosure did not line up with what the Consumer Financial Protection Bureau issued under Regulation F. Under Regulation F, collectors are to provide a date that they consider to be the end of the validation period. The validation period is defined to mean “the period ending 30 days after the consumer receives or is assumed to receive the validation information” while also allowing the collector to assume that the consumer received the validation information on any date that is at least five days after the collector provides it.

The flexibility that the CFPB gave collectors to determine when the validation period ends conflicted with Colorado state law, and collectors weren’t sure what to do. To address the situation, the Colorado Department of Law, which administers the Colorado Fair Debt Collection Practices Act, issued an advisory opinion yesterday. The opinion states that the administrator “does not intend to take an administrative, disciplinary, or enforcement action for a collection agency or debt collector” that uses a date consistent with Regulation F’s validation period instead of the disclosure required under state law.

“The Administrator believes a debt collector or collection agency may, but are not required to, comply with” the provision under the Colorado FDCPA “by providing Colorado consumers with the date certain that a consumer’s validation period ends, if that date certain is consistent with the validation period as defined by Regulation F,” according to the advisory opinion.

To illustrate its point, the opinion included an example:

“In connection with the collection of a debt, a collection agency provides a Colorado consumer with a written notice. As required by Reg. F, the first page of the notice advises the consumer that they have until April 24, 2022 to dispute the validity of the debt. On the second page (or reverse side of the first page) of the notice, the collection agency again provides the consumer of with an April 24, 2022 deadline to dispute the validity of the debt and, further, provides the consumer with the disclosures required by section 5-16-109(1), C.R.S., and 4 C.C.R. 903-1, Rule 2.01. The debt collector has complied with section 5-16-109(1), C.R.S., and 4 C.C.R. 903-1, Rule 2.01.”

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