2019 Legislature Makes Significant Changes to Colorado’s Consumer Protection Act
RECENT EXPANSION OF THE COLORADO CONSUMER PROTECTION ACT
Businesses operating in Colorado should take heed of recent revisions to Colorado’s Consumer Protection Act (“CCPA” or the “Act”) that could substantially expand the scope of prohibited conduct and the number of enforcement actions pursued by the attorney general and district attorneys for violations of the CCPA.
Historically, the CCPA has aimed to deter and punish various deceptive trade practices committed by businesses in dealing with the general public by authorizing the attorney general and district attorneys to pursue enforcement actions for violations of the Act as well as provide a private cause of action for consumers (i.e., a civil lawsuit) who suffer damages as a result of deceptive trade practices. The remedies and penalties for violations of the Act can be severe, as the CCPA authorizes the attorney general and district attorneys to obtain restraining orders, injunctions, and civil penalties, and allows private claimants to recover damages, attorney fees and, in certain circumstances, treble damages.
Until recently, the CCPA’s reach was limited to conduct that had a significant public impact. In other words, if a particular wrong occurred in a private transaction and did not impact the public at large, it would not be actionable under the CCPA. However, during the 2019 session, the Colorado legislature sought to eliminate the public impact requirement. As originally introduced, House Bill 19-1289 would have removed the public impact requirement for both private and enforcement actions. The bill was revised to remove only the public impact requirement from enforcement actions brought by the attorney general and district attorneys, but not for private claimants. Nevertheless, even the more limited revisions still present important changes for business operating in Colorado as the attorney general and district attorneys can now prosecute allegedly deceptive conduct regardless of whether that conduct has any impact on the public.
The significance of this change is heightened when considered along with other revisions to the CCPA, including:
- Revising the definition of certain conduct that violates the CCPA such that a person can violate the Act by acting “recklessly” in addition to acting “knowingly”;
- Increasing the potential penalty for a violation of the Act brought by the attorney general or a district attorney from $2,000 to $20,000 per violation, and from $10,000 to $50,000 per violation committed against an elderly person; and
- Removing the $500,000 damages cap for a series of violations.
Taken together, these changes are significant as the attorney general and district attorneys can now bring enforcement actions if the person or business acts merely recklessly (a much lower standard of proof) as opposed to knowingly, and regardless of whether the conduct has a public impact. Further, by increasing the penalties associated with an enforcement action and removing the damages cap, businesses now face greater liability in the event they are found to have violated the CCPA. Colorado businesses should consult an attorney for further understanding on this topic.