The Colorado Attorney General reached a $175,263 settlement with a lender and a debt management company that are owned and operated by the same individuals. The Colorado Attorney General alleged the companies violated Colorado law when the lender issued loans to customers of the related debt management company. Colorado law prohibits debt management companies from offering loans through a related company due to the risk of a conflict of interest.
The settlement agreement requires the companies to issue refunds of $300 to all 315 of the debt management company’s customers and refunds to the 47 individuals who received a loan from the related lender. Additionally, both companies are now prohibited from lending or providing debt management services to customers in Colorado.