Money and the Law: Defrauded Consumers Have Many Sources to Turn to | Business

There are two federal agencies with a broad mission to protect consumers—the Federal Trade Commission and the Consumer Financial Protection Bureau. Here in Colorado, the Attorney General’s Office is the primary agency responsible for looking out for consumers. The state’s Department of Regulatory Agencies, or DORA, through several of its divisions, also has a significant consumer protection program.

To summarize how Colorado government is organized and how consumer protection fits into the organizational chart, at the highest level of organization, Colorado has three “branches”—the executive branch, the legislative branch, and the judicial branch. Then within the executive branch are (at last count) 20 “departments.” One of those is the Department of Law, and the attorney general (an elected official) heads that department. The Department of Law, in turn, has seven “sections,” one of which is the consumer protection section.

DORA is also a department within the executive branch. It has eleven “divisions.” At least four of these divisions are responsible for consumer protection—the Division of Insurance, the Division of Financial Services, the Division of Real Estate, and the Division of Professions and Occupations.

Focusing on the consumer protections provided by the Attorney General’s Office, here’s a sampling of recent actions that keep the agency busy. In June, the Attorney General’s Office filed a criminal complaint against a former Colorado Springs woman, Leah Valentine, accusing her of insurance fraud related to her pet insurance with Nationwide Mutual Insurance Co. Valentine had insurance for her dog, Pepper, and her cat, Janet, and according to the complaint filed against her, she inflated the cost of veterinary care when submitting claims for reimbursement under her policy. In a press release about the action, the attorney general said, “When people engage in insurance fraud, we all pay the price in the form of higher premiums and increased enforcement costs…”

Then in August, the attorney general got Colorado to join the federal Justice Department and a bipartisan coalition of states in a lawsuit against a Texas company called RealPage Inc. The company sold property owners software that purported to provide accurate rent information. The property owners used that information to set rents on their properties. In reality, RealPage, in cahoots with some of the property owners, allegedly used false and inflated data. That, the Colorado attorney general said, constituted illegal price fixing and resulted in higher rents for thousands of Coloradans.

Also in August, the AG issued a “public notice” aimed at helping consumers understand their rights under Colorado’s defective products law. The Colorado General Assembly in 2024 overhauled the law, which resulted in additional benefits for people who spend the majority of their annual income on a vehicle and end up with multiple, hard-to-fix defects. The revised law went into effect Aug. 7.

And again in August, as a warning to anyone who might think of insurance fraud as a way to boost their income, the attorney general announced that an Aurora woman, Colette Palin, had been sentenced to 20 years of probation and a large restitution order. Palin, while a claims adjuster for Travelers Insurance, fraudulently inflated the amounts on 64 claims she handled. The fraudulently obtained money led to payouts to her and several co-conspirators. Palin said she needed the money to pay her sister’s medical bills and cover gambling debts. As part of her sentence, Palin must undergo treatment for a gambling addiction and is banned from casinos.

As a final comment on consumer protection in Colorado, disgruntled consumers in the state have many places to go with their complaints. And seeking help from a regulatory agency (your taxes at work) is often the best strategy for dealing with the perils of the marketplace.

Jim Flynn is a business columnist. He is of counsel to Flynn & Wright LLC in Colorado Springs. He can be reached at [email protected].