Commercial-Debt Collection Statutes for COLORADO:
(2)(a) “Collection agency” means any:
(I) Person who engages in a business the principal purpose of which is the collection of debts; or
(II) Person who:
(A) Regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another;
(B) Takes assignment of debts for collection purposes;
(C) Directly or indirectly solicits for collection debts owed or due or asserted to be owed or due another;
(D) Collects debt for the department of personnel, but only for the purposes specified in paragraph (d) of this subsection (2).
(c) Notwithstanding the provisions of subparagraph (VII) of paragraph (b) of this subsection (2), “collection agency” includes any person who, in the process of collecting his or her own debts, uses another name which would indicate that a third person is collecting or attempting to collect such debts.
(d) For the purposes of section 12-14-108(1)(f), “collection agency” includes any person engaged in any business the principal purpose of which is the enforcement of security interests. For purposes of sections 12-14-104, 12-14-105, 12-14-106, 12-14-107, 12-14-108, and 12-14-109 only, “collection agency” includes a debt collector for the department of personnel.
(6)(a) “Debt” means any obligation or alleged obligation of a consumer to pay money arising out of a transaction, whether or not such obligation has been reduced to judgment.
(7) “Debt collector” means any person employed or engaged by a collection agency to perform the collection of debts owed or due or asserted to be owed or due to another, and includes any person employed by the department of personnel, or any division of said department, when collecting debts due to the state on behalf of another state agency. Colo. Stat. Ann. § 12-14-103(2)(a), (2)(c)-(d), (6)(a), (7) (West, WESTLAW through Chs. 2, 4, 8, 12, 13, 18, 19, 21, 29, 40, 41, 43, 45, 53, 73, 75, 76, 83, 87, 92,
94, 96, 102, 109, and 500).
(2)(b) “Collection agency” does not include:
(I) Any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor;
(II) Any person while acting as a collection agency for another person, both of whom are related
by common ownership or affiliated by corporate control, if the person acting as a collection agency does so only for creditors to whom it is so related or affiliated and if the principal business of such person is not the collection of debts;
(III) Any officer or employee of the United States or any state to the extent that collecting or attempting to collect any debt is in the performance of such officer’s or employee’s official duties, except as otherwise provided in subsection (7) of this section;
(IV) Any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt;
(V) Any debt-management services provider operating in compliance with or exempt from the
“Uniform Debt-Management Services Act” part 2 of article 14.5 of title 12, C.R.S.; (VI) Repealed by Laws 1990, H.B.90-1005, § 27.
(VII) Any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent that:
(A) Such activity is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement;
(B) Such activity concerns a debt which was extended by such person;
(C) Such activity concerns a debt which was not in default at the time it was obtained by such person; or
(D) Such activity concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor;
(VIII) Any person whose principal business is the making of loans or the servicing of debt not in default and who acts as a loan correspondent, or seller and servicer for the owner, or holder of a debt which is secured by a deed of trust on real property whether or not such debt is also secured by an interest in personal property;
(IX) A limited gaming or racing licensee acting pursuant to part 6 of article 35 of title 24, C.R.S. (e) Notwithstanding paragraph (b) of this subsection (2), “collection agency” includes any person who engages in any of the following activities; except that such person shall be exempt from provisions of this
article that concern licensing and licensees:
(I) Deleted by Laws 2000, Ch. 218, § 2, eff. July 1, 2000.
(II) Is an attorney-at-law and regularly engages in the collection or attempted collection of debts in this state;
(III) Is a person located outside this state whose collection activities are limited to collecting debts not incurred in this state from consumers located in this state and whose collection activities are conducted by means of interstate communications, including telephone, mail, or facsimile transmission, and who is located in another state that regulates and licenses collection agencies but does not require Colorado collection agencies to obtain a license to collect debts in their state if such agencies’ collection activities are limited in the same manner.
(6)(b) “Debt” does not include a debt for business, investment, commercial, or agricultural purposes or a debt incurred by a business. Colo. Stat. Ann. § 12-14-103(2)(b), (e), (6)(b) (West, WESTLAW through
laws effective April 13, 2011).
What is the Fair Debt Collection Practices Act?
The U.S. Congress enacted the FDCPA in 1977 and added it to the Consumer Credit Protection Act in 1978. Its purpose is to eliminate abusive practices of third-party debt collectors. To that end, the Act establishes guidelines for the conduct of debt collectors, defines the rights of consumers, and prescribes penalties for violations.
The FDCPA defines “debt collectors” as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debt … asserted to be owed or due another.”
In other words, “debt collectors” are defined as third parties collecting for a creditor. (As of a 1986 amendment, the FDCPA definition of “debt collector” also includes attorneys who collect debts on a regular basis.)
“Consumers” and “debt” covered under the FDCPA are defined as specifically referring to personal, family or household transactions. Therefore, debts owed by businesses or by individuals for business purposes (commercial debts) are not subject to the FDCPA.
So, if the FDCPA does not apply to commercial debt collection by third parties, how are commercial collectors regulated?
There are no U.S. federal laws, similar to the FDCPA, that regulate third-party commercial (business-to-business) debt collection or provide guidelines for the conduct of commercial debt collectors.
Who is protecting the rights of commercial creditors and debtors?
Commercial Collection Agency Association
The premier body governing the activities of commercial debt collectors is the Commercial Collection Agency Association (CCAA), an arm of the Commercial Law League of America (CLLA). These organizations are not government bodies, nor do they have any jurisdiction over non-members. However, both require high standards of practice and ethics in order for a commercial collection agency to become a certified member.
The Commercial Collection Agency Association was established in 1972 to “improve the quality and reputation of the commercial collection industry.” It currently has more than 200 members. Approximately 100 core members represent the most prestigious commercial collection agencies in the United States.
The CCAA is an arm of the Commercial Law League of America (CLLA), the oldest creditor’s rights organization in the country established in 1895.
Membership in the CCAA
Members of the CCAA are the only collection agencies in the United States certified by the Commercial Law League of America. In order to obtain certification, the agency must meet rigorous criteria.
- The agency must have been in business at least four years prior to application for membership.
- 80% of the agency’s business must be commercial (business-to-business).
- The agency must maintain a separate Trust Account into which all monies belonging to creditors are placed. This Trust Account is reviewed twice annually by the Executive Director of the CCAA.
- The agency must agree to abide by the CCAA Code of Ethics, which sets ethical standards for dealing with creditors, debtors and attorneys.
- Executives of the agency must meet continuing educational requirements and attend regular CCAA meetings. The member agency must complete sixty continuing educational credits annually.
- The agency must post a surety bond of at least $300,000 for the protection of the creditors it serves.
- One person in the agency must also be a member of the Commercial Law League of America.
- The agency must agree to random periodic site visits from the CCAA Executive Director.
- The agency must be in compliance with all local and state licensing requirements and regulations governing commercial collection firms.
Primarily, the Commercial Law League of America and its Commercial Collection Agency Association have assumed responsibility for looking after the needs and rights of creditors and their customers/debtors. State governments that require licensing and bonding of commercial debt collectors also play an important role.
However, since membership in the CCAA is not compulsory, and some firms may provide collection services in a state but never get licensed, it is up to creditors to ensure they (and their debtors) are receiving the most ethical and highest level of commercial collection service.
How? Check to see if your Agency is both a member of the Commercial Collection Agency Association and therefore certified by the Commercial Law League of America, and is licensed in the U.S. states requiring such licensing.
Burt And Associates is a member of both CCAA and CLLA. Also, we are licensed in bonded in all 50 states (where required).