In the national legal community, Colorado has a reputation for having very weak consumer protection laws. Our state’s outdated and restrictive laws continue to fall behind nearly every other state, and consumers suffer the consequences of this the most. HB-1192, a bill at the Colorado legislature sponsored by Rep. Mike Weissman and Sens. Julie Gonzalez and Robert Rodriquez, will work to make common sense updates to Colorado’s laws so consumers have protections that are in line with the rest of the country.
As a state, we’ve seen an increase in consumer complaints — in 2022 there was a 28% increase in filed complaints to the Attorney General's Office compared to 2021. Colorado’s Attorney General Phil Weiser recently launched National Consumer Protection Week by unveiling a list of the top consumer complaints from 2022, which ranged from home service and repair schemes to automotive scams.
As attorneys, an alarming amount of cases have been brought to our attention in which vulnerable Colorado consumers were misled, deceived and abused by corporations. When these cases are brought to trial, despite a myriad of evidence pointing to misconduct and fraud, they often cannot meet the vague and unrealistic standards currently in Colorado’s laws.
Back in 1998, a new requirement was formed in the statute called a “public impact test.” In order to win their case, consumers who have been cheated by a business have to prove the business cheated the majority of its customers. Because of this rule, businesses acting in bad faith, can argue they cannot be liable because they only cheated 15% to 20% of their customers. This has resulted in a free pass to businesses who commit fraud because it is a near-impossible bar for consumers to meet because this court created rule obligates consumers to collect and present a wide swath of evidence in order to prove a business’s deceptive practice greatly impacted others.
Now, Colorado is one of seven other states that have similar “public impact” requirements — however, the six other states that have “public impact” requirements are nowhere near as restrictive as Colorado. Consumer protections are meant to stop fraud in its tracks but this extreme requirement adds complexity to the cases brought forward and is unreasonably burdensome to consumers who have been wronged.
For example, a case in Colorado proved a car dealer committed fraud by deliberately purchasing and reselling a faulty car to a consumer without disclosing the dangerous damages to the car. This case failed to jump through the hoops of proving a “public impact” despite clear evidence pointing to fraud and consumer harm.
A similar case found another car dealer advertised a car as having a rebuilt engine, only for the car to die as the consumer was driving it home. A mechanic later found the engine had never been rebuilt — despite being advertised as such. When this case was brought to court, it failed to meet the requirements of proving “public impact” because it was impossible to prove the dealer did this to a majority of their customers. In both instances, consumers were deceived and exploited by car dealers who faced little repercussion. Sadly, these are just a few examples of the many cases we’ve seen where hardworking Coloradans have had to jump through extreme hurdles in order to be made whole.
When the “public impact” rule was created, the number of consumers needed to constitute a public impact was not defined. In 2004, the Colorado Court of Appeals determined 200 consumers who were cheated was not enough to be a “public impact”. This begs the question: how many consumers need to be deceived, misled and preyed upon in order to get justice?
HB-1192 will make modest updates to Colorado’s laws to remove the restrictive barrier of “public impact.” As the number of consumer protection complaints continue to climb, we need to take the necessary steps to make these updates to ease the arduous barriers currently in place. Under this bill we can hold businesses that are acting in bad faith accountable and encourage better business practices. HB-1192 currently awaits a vote from the Senate Judiciary Committee, and then will move through the Senate. Please urge your state Senators to support this bill in its entirety so we can ensure our laws function to help Coloradans when they are victims of deceptive schemes.
Matt Osborne is a consumer protection attorney in Northglenn. Karen Cody-Hopkins is a student loan and consumer bankruptcy attorney helping Coloradans statewide.
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