Colorado Department of Law — Annual Report 2009
Consumer Protection Section
The Colorado Attorney General’s Office protects Colorado consumers and businesses against fraud and maintains a competitive business environment by enforcing state and federal consumer protection laws; enforcing state and federal antitrust laws; implementing and enforcing provisions of the tobacco master settlement agreements; enforcing state laws on consumer lending, predatory lending, debt collection, rent-to- own and credit repair; and, advocating for residential, small business and agricultural public utility ratepayers.
Consumer Fraud, Antitrust and Tobacco Settlement Enforcement
The Consumer Fraud and the Consumer Protection, Antitrust and Tobacco Units enforce a variety of state and federal consumer protection and antitrust statutes as well as the terms of the Tobacco Master Settlement Agreement and related statutes. The laws enforced by this unit includes the Colorado No-Call List Act (§ 6-1-901, et seq., CRS), the Colorado Antitrust Act (§ 6- 4-101, et seq., CRS), the Foreclosure Protection Act enacted in 2006 (§ 6-1-1101, et seq., CRS) and the mortgage fraud-related laws that were enacted in 2007 (§§ 12-61- 905.5 and 911 and § 38-40-105, CRS). Most of the work of this unit in 2009 focused on mortgage fraud and addressing the fallout from the foreclosure crisis. This unit also launched a new educational program to prevent bid rigging on federal, state and local contracts. This unit also continues to enforce the Colorado No-Call Act and terms of the Tobacco Master Settlement Agreement and related tobacco laws.
Loan Modification Scams In 2009, foreclosures again reached record levels in Colorado. With the rise in foreclosures, new scams were targeted at homeowners who had fallen behind on their payments. Loan modification firms from across the country bombard Colorado borrowers with offers to modify their loans, most with significant upfront fees.
The Foreclosure Protection Act, enacted in 2006, prohibits these firms from accepting an upfront fee from a homeowner in foreclosure. This law was amended in 2009 to broaden its coverage to protect homeowners who were 30 or more days delinquent on their loans. Since this law was enacted in 2006, this office has taken action against 33 foreclosure rescue firms and loan modification companies.
Because of the nationwide scope of this problem, this office has teamed up with the Federal Trade Commission and other state attorneys general to crack down on loan modification companies. One half of this office’s enforcement actions against loan modification companies were concluded as part of two separate sweeps that this federal- state working group conducted in 2009. The first sweep (Operation Loan Lies) was announced July 15, 2009 in Southern California, which is home to many of these loan modification companies. The second sweep (Operation Stolen Hope) was announced Nov. 24, 2009 in Las Vegas, Nevada, one of the regions hardest hit by the foreclosure crisis.
Mortgage Fraud This office continued to take a leading role