Second Regular Session
              Sixty-ninth General Assembly
                    STATE OF COLORADO
                                                 INTRODUCED
                                                           
                                                           
 LLS NO. 14-0182.02 Duane Gall x4335     HOUSE BILL 14-1109
                    HOUSE SPONSORSHIP
 Ginal,
 
                   SENATE SPONSORSHIP
 (None),
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 House Committees
 Senate Committees
 
 
 Business, Labor, Economic, & Workforce Development
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                         A BILL FOR AN ACT
       Concerning the protection of consumers from liability
            resulting from the use of unsolicited checks.
       
       
                           Bill Summary
       
            (Note:  This summary applies to this bill as introduced and does
       not reflect any amendments that may be subsequently adopted. If this bill
       passes third reading in the house of introduction, a bill summary that
       applies to the reengrossed version of this bill will be available at
       http://www.leg.state.co.us/billsummaries.)
       
            Section 1 of the bill specifies that a consumer is not liable on the
       debt resulting from the use of an unsolicited check unless the consumer
       accepted the check by using it. Section 1 also requires  a credit card issuer
       who sends an unsolicited check to a consumer to conspicuously disclose
       the interest rate and finance charges associated with use of the check and
       prohibits the use of terms such as "pre-approved" on the outside of the
       envelope. 
            Section 2 makes a violation of section 1 a deceptive trade practice,
       enforceable through a private lawsuit for treble damages or through
       action by the attorney general.
       
       
       
       Be it enacted by the General Assembly of the State of Colorado:
            SECTION 1.  In Colorado Revised Statutes, add 5-3.7-102 as
       follows:
            5-3.7-102.  Unsolicited checks - limit on consumer liability -
       disclosures required - severability - definitions. (1)  A consumer in
       whose name an unsolicited check is issued is not liable for any
       debt resulting from use of that check, or from use of the
       account on which the unsolicited check is drawn, unless the
       consumer has accepted the check by negotiating it. Failure to
       destroy or return an unsolicited check does not constitute
       acceptance of the check or account.
            (2)  A credit card issuer that extends credit to a
       cardholder through the use of an unsolicited check shall
       conspicuously disclose, on the check or on an accompanying
       attachment or insert, all of the following information:
            (a)  That use of the check will constitute a charge against
       the consumer's credit account;
            (b)  The annual percentage rate and the calculation of
       finance charges associated with the use of the check, if
       different from those associated with the consumer's existing
       credit account; and
            (c)  Whether the finance charges are triggered
       immediately upon the use of the check.
            (3)  A credit card issuer that extends credit to a
       cardholder through the use of an unsolicited check shall
       enclose the check in an envelope that does not reveal any part
       of the check and is not printed with the words "pre-approved",
       "instant cash", or any similar indication that the envelope
       contains a negotiable instrument.
            (4)  Any agreement entered into by a consumer that
       waives, limits, or disclaims the rights set forth in this section is
       hereby declared contrary to public policy and is void.
            (5)  As used in this section:
            (a)  "Check" means a negotiable instrument, as defined by
       section 4-3-104, C.R.S., that has imprinted on it the consumer's
       name.
            (b)  "Unsolicited", in reference to a check, means sent or
       delivered to a person who has not specifically ordered,
       solicited, requested, or arranged to receive the check. The fact
       that a check may have been sent by a person with whom the
       recipient has an existing business relationship or has had prior
       contact does not alter its status as an unsolicited check.
            (6)  If any provision of this section or the application
       thereof to any person or circumstances is held invalid, such
       invalidity shall not affect other provisions or applications of
       this section which can be given effect without the invalid
       provision or application, and to this end the provisions of this
       section are declared to be severable.
            SECTION 2.  In Colorado Revised Statutes, 6-1-105, add (1) (fff)
       as follows:
            6-1-105.  Deceptive trade practices. (1)  A person engages in a
       deceptive trade practice when, in the course of the person's business,
       vocation, or occupation, the person:
            (fff)  Violates section 5-3.7-102, C.R.S.
            SECTION 3.  Safety clause. The general assembly hereby finds,
       determines, and declares that this act is necessary for the immediate
       preservation of the public peace, health, and safety.