[co-author: Stephanie Kozol]*
Compliance Services Colorado, Inc. (CSC) and Colorado Compliance Services, LLC (CCS) (collectively, the parties) recently entered into an Assurance of Discontinuance (AOD) with Colorado Attorney General (AG) Phil Weiser to resolve allegations that, beginning in August 2023, CSC sent deceptive solicitations to businesses in violation of the Colorado Consumer Protection Act.
According to the AG’s allegations, CSC sent solicitations to businesses with which it did not have a preexisting relationship and that did not initiate communications with CSC. The solicitations concerned CSC’s report filing services, through which CSC would file periodic reports with the Colorado secretary of state on behalf of businesses. The secretary of state charges $25 to file these reports, while CSC charged $75 to file on a business’s behalf.
While companies are permitted to charge a fee for filing reports and are also allowed to market these services, they must comply with specific legal requirements. According to the AG, CSC did not follow these requirements, resulting in misleading marketing materials that appeared to be invoices that recipients were legally required to pay. In particular, the AG alleged that CSC included a deadline for payment in bold at the top of its solicitations, cited to Colorado statutes, and threatened recipients with penalties for failing to file a report. The AG also alleged that the solicitations failed to include the following required disclosure:
This is an advertisement. This offer is not being made by, or on behalf of, any government agency. You are not required to make any payment or take any other action in response to this offer.
The parties denied the allegations in the AOD but agreed to permanently cease engaging in any business where they solicit a fee for filing documents with, or retrieving documents from, the secretary of state. In addition, the parties agreed to pay a total of $95,631 to individuals and businesses that paid for CSC’s services. According to the AOD, the AG has identified approximately 3,640 claimants entitled to refunds and has instructed the parties to split the restitution amount proportionally between the claimants.
Why It Matters
The AOD is a reminder that state regulatory agencies are frequently monitoring businesses’ marketing and other practices to identify conduct that could be deemed deceptive (in addition to unfair and abusive). Businesses should remain vigilant and regularly assess their consumer-facing materials to ensure compliance with both federal and state law.
*Senior Government Relations Manager
