Consumer And Commercial Transactions - Digest of Bills

Digest of Bills - 2000

CONSUMER AND COMMERCIAL TRANSACTIONS
S.B. 00-80 Consumer protection. Modifies the "Colorado Consumer Protection Act" by: changing the definition of "buyers' club" from applying to merchandise to applying to goods, food, services, or property that is offered at purportedly discount prices; expanding the circumstances when a commercial telephone seller need not refund payment after a notice of cancellation to include situations other than the receipt of services during the course of a pay-per-call service call; including motor vehicle leases in the prohibition against using deceptive trade practices in motor vehicle sales; and expanding the attorney general's civil discovery authority to include cases involving violations of federal antitrust laws that may be enforced by the attorney general.

APPROVED by Governor March 30, 2000
EFFECTIVE March 30, 2000

S.B. 00-144 Lending regulation - deferred deposit loans. Creates the "Deferred Deposit Loan Act" (Act). Requires a written agreement to make a deferred deposit loan. Sets the maximum loan term at 40 days. Requires the agreement to contain a prominent notice that such loan is intended to be for short-term, not long-term, use, that additional finance charges may be required to renew the loan, and that a consumer is prohibited from holding more than $500 in deferred deposit debt.

Authorizes a deferred deposit lender to charge a finance charge of up to 20% of the loan value for the first $300 loaned plus 7.5% of any amount loaned in excess of $300. Prohibits a consumer from obtaining and a lender from making deferred deposit loans in excess of $500. Gives the consumer the right to rescind a deferred deposit loan by 5 p.m. on the next business day following the loan transaction. Prohibits a consumer from renewing a deferred deposit loan more than once. Requires the lender to refund a prorated portion of the finance charge if the consumer renews the deferred deposit loan prior to the maturity date. Authorizes lenders to pay with business instruments, money orders, or cash, as long as the consumer does not have to pay additional finance charges to cash the business instruments. Requires the lender to endorse a deferred deposit instrument with the actual business name of the lender in order to present or negotiate the instrument. Requires any person offering deferred deposit loans to post all finance charges at the point of sale.

Gives the consumer the right to redeem the deferred deposit instrument if the consumer pays in full. Authorizes a civil action to collect the face value if the deferred deposit instrument is dishonored. Authorizes the lender and consumer to contract for a returned instrument charge not to exceed $25 plus reasonable attorney fees and court costs, unless the attorney fees exceed the value of the loan. Disallows returned instrument charges if the loan proceeds instrument is dishonored by the financial institution or the consumer places a stop-payment order due to forgery or theft. Prohibits criminal charges for returned instruments unless the consumer closes the account prior to the agreed-upon date of negotiation. Requires a lender to place a notice on instruments that are held as a result of a deferred deposit loan before the lender may assign or sell such instruments. Prohibits unfair or deceptive practices.

Clarifies that the provisions of the "Uniform Consumer Credit Code" generally apply to a deferred deposit lender unless such provisions are in conflict with this Act. Expands the definition of a "supervised financial organization" under the "Uniform Consumer Credit Code" to include an entity organized, chartered, or holding a certificate under the laws of any other state.

APPROVED by Governor April 18, 2000
EFFECTIVE July 1, 2000

H.B. 00-1116 Fraud against senior citizens - enhanced civil and criminal penalties. Defines the term "elderly person", for purposes of the "Colorado Consumer Protection Act" and for various provisions of the "Colorado Criminal Code", as a person 60 years of age or older.

Requires any person violating the "Colorado Consumer Protection Act" by the commission of an act against an elderly person to pay a civil penalty of not more than $10,000 to the state general fund for each violation.

Requires persons convicted of certain types of felony and misdemeanor crimes under the "Colorado Criminal Code" against an elderly person to pay a mandatory and substantial fine within the limits provided for such crimes. Makes property used in committing certain felony crimes against an elderly person a class 1 public nuisance and subject to forfeiture.

APPROVED by Governor May 26, 2000
EFFECTIVE August 2, 2000
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see the note from page vi of this digest.

H.B. 00-1185 Uniform Consumer Credit Code - recodification. Repeals and reenacts certain provisions of the "Uniform Consumer Credit Code" (UCCC) based upon the recommendations of the UCCC revision committee contained in the "Report of the Uniform Consumer Credit Code Revision Committee and Actions of the Colorado Commission on Consumer Credit" dated November 30, 1999, and prepared by the UCCC administrator. Makes various revisions, modifications, and additions to UCCC provisions governing:

The scope and jurisdiction of the UCCC and, specifically, the consumer credit transactions made in Colorado that are governed by the UCCC;
Maximum finance charges and fees, including a modification of finance charges on a lender or seller credit card issued by a credit card bank or financial institution;
Supervised loans and supervised lenders, including the provisions on notification filings, license fees, applications for branch location licenses, and other administrative fees that may be established by rule; the grounds for administrative action against, or for denial of, a supervised lender's license; the administrative disciplinary action that may be taken against a creditor; the conformance of such actions to the standards and procedures of the "State Administrative Procedure Act" for such actions; and supervised lenders engaging in another business for the purpose of evading the UCCC or requiring the purchase of any goods or services as a condition of the extension of credit;
The regulation of agreements and practices, including the conforming of the UCCC's consumer credit disclosures to those requirements of the federal "Truth in Lending Act" (TILA) and the federal "Consumer Leasing Act"; the required disclosures regarding the effect of untimely payments on real estate secured consumer credit transactions; and the establishment of a general record-keeping requirement for all creditors;
The limitations on creditors' remedies, including the right of a cosignor to a right to cure notice in connection with an acceleration of the balance due against or making a credit report;
The powers and functions of the UCCC administrator, including the provisions on creditor actions in reliance on UCCC rules or "safe harbor"; the assurances of discontinuance and the requirements the administrator may impose in connection with such an assurance; the factors utilized in an action to determine whether a creditor has made an unconscionable agreement or engaged in fraudulent or unconscionable conduct; and the statute of limitations for civil actions relating to excess charges and the finance charge refunds and consumer penalties recoverable in such an action; and
The council of advisors on consumer credit, including the composition and duties of the council, and the creation of a subcommittee of the council for the purpose of reviewing, repealing, amending, or modifying any rule promulgated by the administrator.

Makes other revisions, particularly with regard to eliminating the distinction between credit sales and consumer loans, that are consistent with the 1974 model UCCC act of the national conference of commissioners on uniform state laws.

Makes technical changes to the definition of "organization" to include corporations, limited liability companies, governments or governmental subdivisions or agencies, trusts, estates, partnerships, limited liability partnerships, cooperatives, or associations. Adds a definition of "regularly" that conforms to the TILA definition and a definition of "written" that includes paper, electronic, digital, magnetic, optical, and electronic records.

Clarifies certain provisions relating to when charges and terms must be contracted for in a written agreement that the consumer may retain.

Repeals the commission on consumer credit.

Specifies that the UCCC applies to the following transactions:

Refinancings, consolidations, and deferrals made on or after July 1, 2000, concerning sales, leases, and loans whenever made;
Sales or loans made on or after July 1, 2000, pursuant to revolving credit accounts entered into, arranged, or contracted for before July 1, 2000; and
All credit transactions made before July 1, 2000, insofar as the UCCC limits the remedies of creditors.

Specifies that certain disclosures in the UCCC take effect January 1, 2001.

Allows all persons licensed under the UCCC's provisions prior to July 1, 2000, to make supervised loans under the UCCC's recodified provisions on those loans.

APPROVED by Governor May 26, 2000
EFFECTIVE July 1, 2000

H.B. 00-1309 Colorado Junk Email Law - restrictions - unsolicited commercial electronic mail. Enacts the "Colorado Junk Email Law". Defines the terms "current or prior business relationship", "electronic mail", "electronic mail service provider", "person", and "unsolicited commercial electronic mail message" for purposes of this law. Sets forth certain activities, with respect to the transmission of certain unsolicited commercial electronic mail messages, that will be violations of this law.

Creates a private civil right of action in the case of violations of this law. Allows the prevailing party to recover actual damages, attorney fees, and costs. Also entitles the prevailing party to collect a civil penalty of $10 for each unsolicited commercial electronic mail message transmitted in violation of this law.

Upon request, authorizes courts to conduct proceedings under this law in such a way as to protect the trade secrets of any party and to protect the security of any computer system or computer software. Authorizes county courts and small claims courts to enter injunctive relief in cases filed under this law.

Provides civil immunity for electronic mail service providers that adopt measures to prevent the transmission of unsolicited commercial electronic mail messages in violation of this law, and provides that no electronic mail service provider shall be liable for the mere transmission of unsolicited commercial electronic mail messages over the provider's computer network.

BECAME LAW June 3, 2000
EFFECTIVE August 2, 2000
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see the note from page vi of this digest.

H.B. 00-1347 Consumer protection - sweepstakes and contests. Regulates sweepstakes and contests by: Prohibiting payment of any consideration as a condition for or an influence on the odds of winning; prohibiting false representations regarding the odds of winning, the rules governing the award of prizes, the value of the prize, and the means of delivery of the prize notice; mandating the written format of certain disclosures; and prohibiting prize notices that simulate documents issued by a governmental entity, lawyer, law firm, or insurance or brokerage company. Exempts membership clubs whose use of negative option plans is already regulated by the federal trade commission and certain large catalog sellers from the act. Makes a violation of this act a deceptive trade practice.

APPROVED by Governor May 24, 2000
EFFECTIVE August 2, 2000
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see the note from page vi of this digest.