Colorado § 5-16-109 - Validation of debts.

§ 5-16-109. Validation of debts.

(1) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector or collection agency shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice with the disclosures specified in subsections (1)(a) to (1)(e) of this section. If the disclosures are placed on the back of the notice, the front of the notice shall contain a statement notifying consumers of that fact. The disclosures shall state:

(a) The amount of the debt;

(b) The name of the creditor to whom the debt is owed;

(c) That, unless the consumer disputes the validity of the debt or any portion of the debt within thirty days after the consumer's receipt of the notice, the debt will be assumed to be valid by the debt collector or collection agency;

(d) That, if the consumer notifies the debt collector or collection agency in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector or collection agency will obtain verification of the debt or a copy of a judgment against the consumer and a copy of the verification or judgment will be mailed to the consumer by the debt collector or collection agency;

(e) That upon the consumer's written request within the thirty-day period, the debt collector or collection agency will provide the consumer with the name and address of the original creditor, if different from the current creditor.

(2) If the consumer notifies the debt collector or collection agency in writing within the thirty-day period described in subsection (1)(c) of this section that the debt, or any portion thereof, is disputed or that the consumer requests the name and address of the original creditor, the debt collector or collection agency shall cease collection of the debt, or any disputed portion thereof, until the debt collector or collection agency obtains verification of the debt or a copy of a judgment or the name and address of the original creditor and mails a copy of the verification or judgment or name and address of the original creditor to the consumer.

(3) The failure of a consumer to dispute the validity of a debt under this section shall not be construed by any court as an admission of liability by the consumer.

(4) It shall be an affirmative defense to any action based upon failure of a debt collector or collection agency to comply with this section that the debt collector or collection agency believed, in good faith, that the debtor was other than a natural person.

(5) Upon written request by the consumer and without fee to the consumer, a debt collector or collection agency collecting on a medical debt shall cease collection until it can provide an itemized statement to the consumer after the request is received. The itemized statement must include:

(a) The name and address of the medical creditor;

(b) The date or dates of service;

(c) The date or dates the medical debt was incurred;

(d) A detailed list of the specific health-care services and medical products or devices, if any, provided to the consumer;

(e) The name of the facility where health-care services were provided or the name of the merchant where the consumer purchased medical products, devices, or durable medical goods;

(f) The amount of the principal for any medical debt incurred;

(g) An itemization of the current amount of the debt due at the time the itemized statement is generated, reflecting interest, fees, payments, and credits since the dates described in subsections (5)(b) and (5)(c) of this section, and including negotiated insurance rates, financial assistance applied, or other discounts;

(h) For medical debt from a health-care facility, as defined in section 25.5-3-501 (1), whether the consumer was screened for financial assistance; and

(i) For medical debt from a health-care facility, as defined in section 25.5-3-501 (1), whether the consumer was found eligible for financial assistance and, if so, the amount due after all financial assistance is applied to the itemized statement.

Source: L. 2017: Entire article added with relocations, (HB 17-1238), ch. 260, p. 1088, § 1, effective August 9. L. 2023: (1)(c) amended and (5) added, (SB 23-093), ch. 152, p. 643, § 3, effective May 4.

Editor's note: This section is similar to former § 12-14-109 as it existed prior to 2017.

ANNOTATION

The sufficiencies of the notice are judged under the least sophisticated consumer standard. Flood v. Mercantile Adjustment Bureau, LLC, 176 P.3d 769 (Colo. 2008) (decided under former law).

Notice insufficient because statement on the front of the letter appeared to conflict with the required notice. Flood v. Mercantile Adjustment Bureau, LLC, 176 P.3d 769 (Colo. 2008) (decided under former law).

Whether a validation notice is contradicted or overshadowed under the least sophisticated consumer standard is a question of law. Garrett v. Credit Bureau, 2018 COA 150, 431 P.3d 698.

Notice of validation was contradicted or overshadowed when the debt collector sent a second notice with the statement "we cannot help you unless you call" in capitalized and bolded font that was larger than the rest of the notice. Because this statement was capable of being reasonably interpreted by the least sophisticated consumer as changing the manner in which the consumer was required by law to dispute the debt or its amount, it was, as a matter of law, deceptive or misleading. Garrett v. Credit Bureau, 2018 COA 150, 431 P.3d 698.