Why Colorado isn't reporting deadbeats to credit-reporting agencies

Posted at 12:40 PM, Jul 04, 2016
and last updated 2016-07-04 14:40:03-04

Colorado’s official collection agency — the one that chases down deadbeats who owe a variety of obligations ranging from court-ordered child support to campus parking tickets — hasn’t reported the scofflaws to credit agencies for a year, a practice that’s expected to continue until the middle of  2017, The Denver Post has learned.

That means hundreds of thousands of debtors who owe the state more than $340.9 million in outstanding bills can keep skipping payments without concern about how it will affect their personal credit — because it won’t.

Colorado’s Central Collection Services, a part of the state’s Department of Personnel and Administration, hasn’t flagged credit-reporting agencies such as Equifax or TransUnion about debt deadbeats since June 2015, when installation of a new computer system began, agency spokesman Doug Platt confirmed.

And CCS won’t be reporting the deadbeats until mid-2017 when the installation is expected to be finished, he said.

So while other consumers who get behind on credit card, mortgage or car loan payments can expect to see a ding on their credit score — and their ability to borrow money or get the best insurance prices — the more than 317,000 people CCS is trying to collect from won’t.

“Finding out that someone else got off while you don’t get a break … hardly seems fair,” said John Lynch, director of the Center for Research on Consumer Financial Decision Making at the University of Colorado’s Leeds School of Business. “That’s similar to the whole wave from the mortgage crisis, of who was underwater, who got a walk-away deal while the other guy was paying his mortgage on time. There was a lot of resentment.”

Read more from our partners at The Denver Post.