On September 23, the Colorado attorney general announced a settlement with a debt collection agency over allegations that it sought default judgments on medical debt for 44 Colorado consumer accounts without filing the affidavits required under state law. The attorney general noted the stipulated final agency order marks the first enforcement action under SB 23-093 (previously covered by InfoBytes here), which requires collection agencies pursuing default judgments on medical debt incurred on or after May 4, 2023, to file an affidavit from an authorized employee of the medical provider establishing the amount and nature of the debt. According to the order, the administrator found that the debt collector instead sometimes filed assignment documents that allegedly did not meet the statute’s evidentiary requirements. The debt collector disputed the findings and maintained that its collection activities were not in violation of state law but agreed to resolve the investigation without admitting to any alleged wrongdoing.

Under the order, the debt collector must pay a $30,000 fine, cease all noncompliant collection practices and move to vacate any default judgments entered in the 44 unsatisfied cases. The debt collector may not seek judgment again in those matters unless it provides new notice to the affected consumers and files compliant affidavits. The order also bars the debt collector from applying post-judgment payments to the judgment amount unless it files a compliant affidavit or the consumer expressly directs application in writing after being notified that no such affidavit is on file. If the debt collector does not elect to seek judgment again, it must refund post-judgment payments within 49 days of the effective date of the order and provide an accounting of all refunds to the administrator within 91 days.