A third-party debt collection company settled with the Colorado Attorney General’s office over accusations of illegally collecting high-interest debt from nearly 29,000 consumers who defaulted on loans issued by tribal lending entities.

TrueAccord agreed to pay the state $500,000 to be used for consumer refunds over allegations it violated the Colorado Fair Debt Collection Practices Act between 2017 and 2022, according to a news release from the Colorado Attorney General’s Office. 

TrueAccord attempted to collect debts for tribal lending entities, which often advertise to consumers that their loans are subject to tribal law, rather than Colorado law, the office said, adding most of the loans had interest rates over 500% in annual percentage rate, with some reaching nearly 900% APR.

Unlicensed loans are capped at 12% APR under Colorado law.

The Attorney General’s Office said the company violated state law by telling consumers they owed the full loan balance when they collected or attempted to collect on the debt. 

The $500,000 will be used to refund those who paid TrueAccord on these loans.

Under the settlement, TrueAccord will be barred from collecting on any debt where the original loan’s APR exceeded state limits, the Attorney General’s Office said. 

“Colorado consumers are protected from high interest rates on unlicensed loans regardless of where those loans originate,” Attorney General Phil Weiser said in a statement. “My office will hold accountable any companies that violate the law by trying to collect on illegal, high-interest debt. In this action, we are doing just that, and getting money back to consumers in the process.”