The Attorney General of Colorado yesterday announced a settlement with TrueAccord that will see the company pay $500,000 to settle claims it collected on illegal high-interest debt.
The Background: In September 2022, investigators with the Colorado Department of Law notified the company that they would be conducting an examination of the company’s debt collection processes. The company was subsequently cited for violating the state’s Fair Debt Collection Practices Act.
- Between 2017 and 2022, TrueAccord attempted to collect or did collect from 29,000 consumers who had defaulted on loans that were issued by tribal lending entities. Most of the loans had an APR above 500% and some were as high as 900%. Colorado law limits the interest rate on unlicensed loans to 12%.
- By telling consumers they owed the full balance on illegal loans, TrueAccord was found to have violated state law, the AG’s office announced.
The Settlement: TrueAccord will pay $500,000, which will be used to repay consumers who made payments on the illegal loans.
- The company is also prohibited from collecting on any debt where the original loan’s APR exceeds state limits.
- TrueAccord denied its conduct violated Colorado law and denied all of the AG’s allegations against it.
The Last Word: “Colorado consumers are protected from high interest rates on unlicensed loans regardless of where those loans originate,” said Colorado AG Phil Weiser. “My office will hold accountable any companies that violate the law by trying to collect on illegal, high-interest debt. In this action, we are doing just that, and getting money back to consumers in the process.”
