| Page 3 | Attorney General - State of Colorado

Investment Fraud

Colorado citizens are swindled out of millions of dollars each year through various types of investment fraud.  Investment fraud takes many forms including pyramid or “Ponzi” schemes, oil and gas investment schemes, “fix-and-flip” housing scams, and others.  Investment fraud cases are handled by the Securities Fraud Unit of the Attorney General’s Office and generally involve the prosecution of individuals who solicit and receive investor money for investment schemes that are not regulated by other governmental agencies.

Our aging populations are often specifically targeted by those seeking to perpetrate investment crimes and the resulting losses to retirement funds and life savings can be catastrophic.  In addition, due to the impending explosion of baby boom generation retirements the potential for losses is ever increasing.  The Securities Fraud Unit has recently ventured into new territories including fraud related to investments in marijuana dispensaries. 

The Attorney General has been granted the authority to aggressively prosecute criminal violations relating to investments and securities fraud.  The Office of the Attorney General is recognized statewide for its expertise on securities fraud matters and works many high profile cases.  The Unit independently investigates, charges when necessary, and prosecutes investment fraud violations statewide.  The Securities Fraud Unit frequently utilizes the Statewide Grand Jury for these sophisticated and complex cases.  The Securities Fraud Unit closely collaborates with the Colorado Division of Securities and Colorado law enforcement agencies to prosecute these crimes.

Digital Fraud

Consumers are making an increasing number of purchases over the Internet. The Internet offers great convenience, but consumers purchasing online should use the same caution that they do with brick and mortar companies. Many of the same tactics used by dishonest people in the past over the phone or through the mail are now used on the Internet. Failure to deliver paid-for items, fraudulent investment offers, multi-level marketing or pyramid schemes, and the familiar postal chain letters are just a few of the old tried-and-true scams which have been converted for use on the Internet.

Fraudulent companies have the ability to disappear into "cyberspace," erasing all traces of their operation and leaving you with few remedies against them. Therefore, especially on the Internet, keep in mind that if it sounds too good to be true, it probably is.

Mail Fraud

While digital fraud has continued to grow with the advancements of technology, scammers continue to send out fraudulent schemes by mail in an effort to defraud consumers of their hard earned money. 

Whether the scheme involve supposed free airline tickets or sea cruises, to phony work-at-home schemes and cashier check scams, to fake lottery schemes, consumers should be wary of any one of the innumerable offers received through the mail.   

Creditor Fraud

The Consumer Credit Unit enforces several state laws relating to consumer credit and debt collection:

  • Uniform Consumer Credit Code - Information on consumer lending laws (the Uniform Consumer Credit Code), as well as the Credit Services Organization Act (credit repair), the Rental Purchase Agreement Act (rent-to-own), and the Refund Anticipation Loans Act.
     
  • Collection Agency Regulation - Information on the Colorado Fair Debt Collection Practices Act (consumer debt collection) and the Colorado Child Support Collection Consumer Protection Act.
     
  • Debt Management - Information on the Uniform Debt-Management Services Act regulating credit counseling and debt settlement companies.

Fraud Center

Insurance Fraud

Colorado residents pay millions of dollars annually in insurance premiums.  When insurance fraud in its many varied forms occurs, those costs are passed on to Colorado citizens in the form of higher premiums and insurance costs.  The Insurance Fraud Unit has been tasked with rooting out fraud statewide.  This is accomplished through detailed investigations by our specially trained investigators.  In addition, we criminally prosecute those criminal offenses relating to insurance fraud where the crimes are committed.   

Staffed with an experienced team of fraud investigators and attorneys, the Insurance Fraud Unit independently investigates and prosecutes allegations of insurance fraud in every county of the state.  The combined expertise of these seasoned investigators and prosecutors allows the Unit to conduct thorough investigations and build strong cases.  Our staff is highly regarded statewide due to their expertise in this under-reported and under-prosecuted area of fraud. Staff of the Insurance Fraud Unit routinely share their expertise in this area and provide assistance throughout the state.  The Insurance Fraud Unit is funded exclusively through an industry assessment on insurance companies doing business in the state. The Unit also works closely with other agencies including the National Insurance Crime Bureau (NICB), Colorado Division of Insurance, FBI, and local police departments.

In response to the growing trend of insurance fraud within the State of Colorado, the Financial Fraud Unit of the Colorado Attorney General’s Office was a strong proponent in the Colorado legislature for establishing a new crime specifically for Insurance Fraud.  Section 18-5-211, C.R.S., makes most insurance fraud a felony-level offense and applies across the board to fraud committed by insurance claimants, agents and brokers.

Identity Theft

Identity theft occurs when someone fraudulently uses your personal identifying information to obtain credit, take out a loan, open accounts, get identification, or any other activity in which a criminal uses your information in a fraudulent way.

For many victims, identity theft is about more than the loss of money. It is about the loss of security, independence and self-worth. Our goal at the Colorado Attorney General's Office is to provide some helpful tips to help you avoid becoming a victim of identity theft, and to walk you through some important steps in case you do become a victim.

Disaster Fraud

Coloradoans face many natural disasters and weather emergencies each year including wildfires, tornadoes, hail storms, snowstorms, and even flooding.  Natural disasters give scam artists unique opportunities to take advantage of those affected and even those wanting to help others. 

Some fraudsters are unlicensed contractors who enter the affected area with promises to finish repairs quickly and at great prices.  Other scammers commit identity theft by stealing personal information from those trying to rebuild their lives.  The reach of scammers isn't limited to those in the affected area either.  Fraudsters pose as charities soliciting donations under the guise it will help those in need.  The following information is intended to help keep you safe from fraud when a natural disaster is involved.

Mortgage Fraud

Colorado was one of the first states to feel the brunt of the foreclosure crisis. In 2006 Colorado led the nation in foreclosures per capita. Although Colorado has since dropped in the overall number of foreclosures and is slowly recovering from the crisis, the Colorado Attorney General has been on the forefront in dealing with foreclosure and lender related fraud.

The aggressive pursuit against those defrauding Colorado residents has resulted in prevention of the loss of homes for thousands of Colorado residents while providing hundreds of millions in financial loan assistance and direct financial relief to residents, affordable housing projects, legal assistance to low income and elderly residents, and to housing counselor agencies such as the Colorado Foreclosure Hotline.    

From pursuing cases against mortgage brokers, foreclosure rescue and loan modification firms, to foreclosure law firms, the Colorado Attorney General remains dedicated to pursuing those preying on Colorado consumers.  

Common Scams

Each year, millions of Americans fall victim to scams perpetrated from all over the globe. Although it is difficult to determine exact figures, the Federal Trade Commission (FTC) estimates that, last year alone, more than $1.7 billion was lost due to fraudulent activity. While exact figures are not available, it is also estimated fraud losses total in the hundreds of millions of dollars in Colorado alone.

Consumer education is the best weapon in the fight against fraud; therefore, being knowledgeable of the tactics used by scammers will greatly reduce your chances of becoming a victim.