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The Colorado bill would require debt collectors to disclose who the debtor owes

A bill introduced in the Colorado Legislature following reports that patients were left confused when a company they had never heard of sued them for medical debt would limit the way debt collectors can pursue payments.

HB-1380, which passed the state House on Wednesday, would require debt collectors operating in the state to disclose who originally owed the debt, and would only allow the debt collector to sue if they have full discretion had to settle the debt.

Rep. Javier Mabrey, a Denver Democrat and one of the bill’s sponsors, said he is pushing the proposal in response to a 9News and Colorado Sun investigation that found UCHealth sued patients after transferring medical debts to a collection agency. Some patients said they didn’t understand why they were being sued, because the plaintiff was a company they had never heard of.

“What we’re trying to do is add transparency,” Mabrey said.

UCHealth is not opposed to the bill, spokesman Dan Weaver said.

The National Federal of Independent Business Colorado testified against the bill, saying it would force companies to manage their debt themselves, which is not their area of ​​expertise. An earlier version of the bill prohibited transferring the debt to collection agencies unless the agency had purchased the debt.

It would also make public the companies’ efforts to collect debts, state director Tony Gagliardi said in written testimony.

“This could cause unwarranted prejudice against the company,” he said.