Colorado AG Obtains $175,263 in Borrower Debt Relief

Colorado

On August 19, 2019, the Colorado Attorney General (AG) announced that it had reached a settlement with two financial services firms, resolving allegations that the firms had violated Colorado consumer protection laws. Between 2017 and 2019, one of the firms – a lender operating in the state – made numerous loans to the clients of a debt reduction service provider. However, both the lender and the debt reduction service provider were owned and operated by the same individuals. The AG alleged that this arrangement created a conflict of interest and was prohibited under Colorado law.

Refunds totaling $175,263 will be distributed to the 315 Colorado borrowers allegedly harmed by the conflict of interest. Of the refunds, the debt reduction service provider must refund $300 to all 315 clients impacted by the conflicts, totaling $94,500, and the lender must issue refunds to the 47 impacted borrowers, totaling $80,763.60. In addition to the refunds, the debt reduction service provider must revise existing client agreements, and both companies are barred from either lending or providing debt reduction services in the state.

Download PDF