The company will pay consumer restitution and must not collect on loans where the interest exceeds state limits.
01/22/2024 12:15 P.M.
2.5 minute read
Colorado Attorney General Phil Weiser and TrueAccord reached a settlement agreement (PDF) related to reported violations of the Colorado Fair Debt Collection Practices Act for collection on high-interest debt.
The Colorado Department of Law investigators notified TrueAccord they would examine the company’s debt collection practices in 2019. The examination was part of state officials’ routine monitoring of debt collectors and other consumer credit companies.
“Investigators found that, from 2017 to 2022, TrueAccord collected or attempted to collect on roughly 29,000 consumers who defaulted on loans issued by tribal lending entities,” according to a news release. “These lenders typically operate online and advertise to consumers that their loans are subject to tribal law, rather than Colorado law. Most loans had interest rates over 500% APR, and some approached 900% APR—far greater than the 12% cap for unlicensed loans under Colorado law.”
TrueAccord stopped collections on tribal loans in June 2022 and denies the conduct violated any Colorado law and allegations of wrongdoing, according to the settlement agreement.
According to the attorney general, under Colorado state law consumers are not required to pay finance charges of over 12% for loans from unlicensed lenders, and they qualify for refunds if they do pay. Native American tribes are sovereign and typically immune from state laws and licensing requirements.
The company provided the following statement to ACA International:
“TrueAccord recently entered into an assurance of discontinuance with the state of Colorado regarding lenders affiliated with federally-recognized Native American tribes following a standard 2019 collection agency audit. TrueAccord denies that any of our practices violated the Colorado statutes. As a result of the agreement, Colorado is compensating consumers who made payments on those accounts. None of the terms agreed to will impact TrueAccord’s delivery of collection services to our clients and consumers; we continue to focus on our mission to create better experiences for consumers in debt.”
Compliance Resources
ACA International members should review the laws on interest and fees where they are licensed.
Though Native American tribes are sovereign and not subject to state interest rate caps, the position of many states and regulatory bodies is licensed debt collection companies are not permitted to collect on tribal loans.
Members can get compliance resources related to interest and fees at the state level in ACA SearchPoint: State Interest Rates (PDF) or ACA SearchPoint: Adding Fees to Debts (PDF.)
Plus: Don’t miss ACA’s State Guide Cohort monthly webinar series for updates into state collection laws and practices. The next webinar is at 1 p.m. CST Feb. 13.
ACA also has an extensive on-demand education library with topic filters, including for the Fair Debt Collection Practices Act, available at our online store and through the All-Access Training Zone.
Remember, subscribe to ACA Daily and Member Alerts under your My ACA profile when logged in to acainternational.org to receive updates on the ACA Huddle.