A Kansas-based company has agreed to pay half a millions dollars that will be refunded to Native Americans in Colorado for its illegal debt collection practices. TrueAccord reached a settlement with the Colorado Attorney General's Office in January, according to a press release from the AG's office. Investigators from the state agency learned the TrueAccord contacted 29,000 consumers between 2017 and 2022. Those consumers had defaulted on loans issued by tribal lending entities. Those lend entities, according to the state AG's office, claim their loans are subject to tribal law rather than Colorado law. Most of the loans had interest rates over 500% annual percentage rate (APR), the state claimed. Some loans even approached 900% APR.
Colorado state law caps the interest rate for the remaining balance of a consumer loan at 12 percent per year.
TrueAccord violated state law - the Colorado Fair Debt Collections Act, in particular - by collecting or attempting to collect the due amounts under the same terms as the tribal entities, according to Colorado Attorney General Phil Weiser.
"Colorado consumers are protected from high interest rates on unlicensed loans regardless of where those loans originate," Weiser stated in the press release. "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."
In addition to the $500,000 penalty for refunds, TrueAccord was barred from collecting on any debt where the original loan's APR exceeded state limits. The company will provide the state with a list of affected consumers within 30 days of the settlement, the AG's office reported. To read more click here.