C.R.S. Section 5-19-228
Prohibited acts and practices


(a)

A provider may not, directly or indirectly:

(1)

Misappropriate or misapply money held in trust;

(2)

Settle a debt on behalf of an individual without the individual’s agreement to the settlement terms pursuant to a settlement agreement or other valid contractual agreement executed by the individual;

(3)

Exercise or attempt to exercise a power of attorney after an individual has terminated an agreement;

(4)

Initiate a transfer from an individual’s account at a bank or with another person unless the transfer is:

(A)

A return of money to the individual; or

(B)

Before termination of an agreement, properly authorized by the agreement and this part 2, and for:
(i)
Payment to one or more creditors pursuant to a plan; or
(ii)
Payment of a fee;

(5)

Offer a gift or bonus, premium, reward, or other compensation to an individual for executing an agreement;

(6)

Offer, pay, or give a gift or bonus, premium, reward, or other compensation to a person for referring a prospective customer, except for a sales lead, if the person making the referral has a financial interest in the outcome of debt-management services provided to the customer, unless neither the provider nor the person making the referral communicates to the prospective customer the identity of the source of the referral;

(7)

Receive a bonus, commission, or other benefit for referring an individual to a person;

(8)

Structure a plan in a manner that would result in a negative amortization of any of an individual’s debts, unless a creditor that is owed a negatively amortizing debt agrees to refund or waive the finance charge upon payment of the principal amount of the debt;

(9)

Compensate its employees on the basis of a formula that incorporates the number of individuals the employee induces to enter into agreements;

(10)

Settle a debt or lead an individual to believe that a payment to a creditor is in settlement of a debt to the creditor unless, at the time of settlement, the individual receives a certification by the creditor that the payment is in full settlement of the debt;

(11)

Make a representation that:

(A)

The provider will furnish money to pay bills or prevent attachments;

(B)

Payment of a certain amount will permit satisfaction of a certain amount or range of indebtedness; or

(C)

Participation in a plan will or may prevent litigation, collection activity, garnishment, attachment, repossession, foreclosure, eviction, or loss of employment;

(12)

Misrepresent that it is authorized or competent to furnish legal advice or perform legal services;

(13)

Represent that it is a not-for-profit entity unless it is organized and properly operating as a not-for-profit under the law of the state in which it was formed or that it is a tax-exempt entity unless it has received certification of tax-exempt status from the federal internal revenue service; except that, if the provider represents that it is a not-for-profit entity and the provider does not have tax-exempt status under section 501 (c) (3) of the federal “Internal Revenue Code of 1986”, as amended, the provider shall state, in a clear and conspicuous manner and in close proximity to the representation: “We are not an educational, charitable, or religious organization granted tax-exempt status by the Internal Revenue Service.”

(14)

Take a confession of judgment or power of attorney to confess judgment against an individual;

(15)

Employ an unfair, unconscionable, or deceptive act or practice, including the knowing omission of any material information; or

(16)

Advise, encourage, or suggest to the individual not to make a payment to creditors under the plan.

(b)

If a provider furnishes debt-management services to an individual, the provider may not, directly or indirectly:

(1)

Purchase a debt or obligation of the individual;

(2)

Receive from or on behalf of the individual:

(A)

A promissory note or other negotiable instrument other than a check or a demand draft; or

(B)

A post-dated check or demand draft;

(3)

Lend money or provide credit to the individual, except as a deferral of a settlement fee at no additional expense to the individual;

(4)

Obtain a mortgage or other security interest from any person in connection with the services provided to the individual;

(5)

Except as permitted by federal law, disclose the identity or identifying information of the individual or the identity of the individual’s creditors, except to:

(A)

The administrator, upon proper demand;

(B)

A creditor of the individual, to the extent necessary to secure the cooperation of the creditor in a plan; or

(C)

The extent necessary to administer the plan;

(6)

Except as otherwise provided in section 5-19-223 (d)(2), provide the individual less than the full benefit of a compromise of a debt arranged by the provider;

(7)

Charge the individual for or provide credit or other insurance, coupons for goods or services, membership in a club, access to computers or the internet, or any other matter not directly related to debt-management services or educational services concerning personal finance; or

(8)

Furnish legal advice or perform legal services, unless the person furnishing that advice to or performing those services for the individual is licensed to practice law.

(c)

This part 2 does not authorize any person to engage in the practice of law.

(d)

A provider may not receive a gift or bonus, premium, reward, or other compensation, directly or indirectly, for advising, arranging, or assisting an individual in connection with obtaining an extension of credit or other service from a lender or service provider, except for educational or counseling services required in connection with a government-sponsored program.

(e)

Unless a person supplies goods, services, or facilities generally and supplies them to the provider at a cost no greater than the cost the person generally charges to others, a provider may not purchase goods, services, or facilities from the person if an employee or a person that the provider should reasonably know is an affiliate of the provider:

(1)

Owns more than ten percent of the person; or

(2)

Is an employee or affiliate of the person.

Source: Section 5-19-228 — Prohibited acts and practices, https://leg.­colorado.­gov/sites/default/files/images/olls/crs2023-title-05.­pdf (accessed Oct. 20, 2023).

5‑19‑101
Short title
5‑19‑102
Legislative declaration
5‑19‑103
Definitions
5‑19‑104
Prohibited acts
5‑19‑105
Written disclosure required
5‑19‑106
Content of written disclosure
5‑19‑107
Written contracts required
5‑19‑108
Waivers and exemptions
5‑19‑109
Criminal penalties and injunctive relief
5‑19‑110
Powers of administrator of the uniform consumer credit code and district attorney - subpoenas - hearings
5‑19‑111
Damages
5‑19‑112
Aiding or assisting violation
5‑19‑113
Remedies cumulative
5‑19‑114
Relation between parts of article
5‑19‑201
Short title
5‑19‑202
Definitions
5‑19‑203
Exempt agreements and persons
5‑19‑204
Registration required
5‑19‑205
Application for registration - form, fee, and accompanying documents - repeal
5‑19‑206
Application for registration - required information
5‑19‑206.5
Name-based judicial record check
5‑19‑206.7
Remote work authorized - definition
5‑19‑207
Application for registration - obligation to update information
5‑19‑208
Application for registration - public information
5‑19‑209
Certificate of registration - issuance or denial
5‑19‑210
Certificate of registration - timing
5‑19‑211
Renewal of registration
5‑19‑212
Registration in another state
5‑19‑213
Bond required
5‑19‑214
Bond required - substitute
5‑19‑215
Good faith requirement
5‑19‑216
Customer service
5‑19‑217
Prerequisites for providing debt-management services
5‑19‑218
Communication by electronic or other means - definitions
5‑19‑219
Form and contents of agreement
5‑19‑220
Cancellation of agreement - waiver
5‑19‑221
Required language
5‑19‑222
Trust account
5‑19‑223
Fees and other charges
5‑19‑224
Voluntary contributions
5‑19‑225
Voidable agreements
5‑19‑226
Termination of agreements
5‑19‑227
Periodic reports - retention of records
5‑19‑228
Prohibited acts and practices
5‑19‑229
Notice of litigation
5‑19‑230
Advertising
5‑19‑231
Liability for the conduct of other persons
5‑19‑232
Powers of administrator - rules
5‑19‑233
Administrative and legal remedies
5‑19‑234
Suspension, revocation, or nonrenewal of registration - definitions
5‑19‑235
Private enforcement
5‑19‑236
Violation of unfair or deceptive practices statute
5‑19‑237
Statute of limitations
5‑19‑238
Uniformity of application and construction
5‑19‑239
Relation to federal “Electronic Signatures in Global and National Commerce Act”
5‑19‑240
Transitional provisions - application to existing transactions
5‑19‑241
Severability
5‑19‑242
Repeal of part
Green check means up to date. Up to date

Current through Fall 2024

§ 5-19-228’s source at colorado​.gov