Colorado law makes it a crime for a person or entity to engage in deceptive sales or business practices. This category includes false advertising, making false statements to generate business, or using fraudulent financing. Deceptive business practices could result in fraud or theft charges as well as civil damages.
In this article, our Denver Colorado criminal defense lawyers will address:
- 1. What are deceptive trade practices under CRS 6-1-105?
- 2. What are the penalties for deceptive trade?
- 3. What are the penalties for violating the Colorado Consumer Protection Act (CCPA)?
- 4. What is the civil liability for deceptive business practices?
- 5. Related Offenses
1. What are deceptive trade practices under CRS 6-1-105?
In Colorado, deceptive trade practices include fraud or misrepresentation in business dealings. Ten examples of deceptive acts and unfair trade practices are:
- Misleading advertising to the general public
- Lenders making bad faith claims about financing to potential homeowners or motor vehicle buyers
- False statements about a competitor’s product or practices
- False information about a good’s source or certification
- Misrepresenting a product’s ingredients
- False representations about whether the defendant’s goods have a warranty
- Not disclosing material information about a good or service
- Misrepresenting the quality or value of a product or service
- “Bait and switch” advertising to potential consumers
- Use of fake testimonials in ads and commercials1
In sum, deceptive sales practices could involve everything from small exaggerations to help sell a product to a complex multi-million dollar pyramid scheme.
2. What are the penalties for deceptive trade?
Colorado enforcement actions for deceptive business practices may depend on:
- the value of the property,
- the extent of the fraud,
- the specific victims involved,
- the number of consumers involved,
- the defendant’s criminal history,
- whether there was a significant public impact,
- the disparity of bargaining power between the defendant and victims, and/or
- the type of fraud involved.
In some cases, deceptive sales and business practices can be charged under Colorado’s theft statute. Theft (CRS 18-4-401) can be charged as a petty offense, misdemeanor or felony, depending on the value of theft involved. Theft or fraud involving less than $300 is a petty offense. Theft or fraud involving $300 to less than $2,000 is a misdemeanor. Theft or fraud of $2,000 or more is a felony.
|Value of Deceptive Business Fraud||Class of Criminal Offense||Penalties|
|$2,000 or more but less than $5,000||Class 6 Felony||12 to 18 months in prison and a fine of up to $100,000|
|$5,000 or more but less than $20,000||Class 5 Felony||1 to 3 years in prison and a fine of up to $100,000|
|$20,000 or more but less than $100,000||Class 4 Felony||2 to 6 years in prison and a fine of up to $500,000|
|$100,000 or more but less than $1 million||Class 3 Felony||4 to 12 years in prison and a fine of up to $750,000|
|$1 million or more||Class 2 Felony||8 to 24 years in prison and a fine of up to $1,000,000|
In addition to prison, there is also a mandatory parole period for felony theft offenses. Mandatory parole ranges from 1 to 5 years for felony theft. If an individual commits multiple fraud or theft offenses within a period of 6 months, the value of the thefts can be combined and charged as a single offense.2
If the victim of deceptive sales or business practices is considered an “at-risk” individual under Colorado law, the defendant may face sentencing enhancement. At-risk individuals include people with a disability and elders who are 70 or older. Deceptive sales fraud of $500 or more from an at-risk victim is a class 3 felony, with penalties including up to 12 years in prison and a fine of up to $750,000.3
3. What are the penalties for violating the Colorado Consumer Protection Act (CCPA)?
Under the CCPA, a conviction for promoting a pyramid promotional scheme is a class 1 misdemeanor.4 A pyramid scheme is a fraudulent investment scheme where people are induced to giving money with a promise that they will make more money. However, the scheme is only funded by increasing the number of investors, where no products are sold and no investments are made. The penalties for promoting a pyramid scheme include up to 364 days in jail and/or a fine of up to $1,000.
4. What is the civil liability for deceptive business practices?
In addition to criminal charges filed by the district attorney or attorney general, deceptive business practices can expose an individual to civil liability. The use of deceptive advertising or other deceptive trade practices may be a violation of the CCPA, which provides for civil penalties.
Victims of consumer fraud may also be able to file a civil action to seek the amount of actual damages, triple the amount of damages if the deception was intentional (“treble damages”), as well as the cost of reasonable attorney’s fees.5
5. Related Offenses
5.1 Computer Crimes
In Colorado, it is a criminal offense under CRS 18-5.5-102 to use a computer for the purpose of devising or executing any scheme to defraud. Accessing a computer or computer system to commit theft may be charged as a petty offense, misdemeanor or felony, depending on the damage or value of the theft. Penalties for computer crime as a class 3 felony include 4 to 12 years in prison and a fine of up to $750,000.
5.2 Real Estate Fraud
In Colorado, real estate fraud involves engaging in wrongful acts using the property for financial gain. Real estate fraud includes mortgage fraud, credit skimming, foreclosure fraud, credit fraud, deed forgery, and other forms of property fraud. Real estate fraud charges in Colorado may be charged as a petty offense, misdemeanor or felony offense, depending on the value of the fraud.
Call our law firm for help and legal advice…
If you have been accused of deceptive sales or fraud related to a business transaction, please contact us at Colorado Legal Defense Group. We have law offices in Denver, Colorado Springs, and Greeley. Disclaimer: Results cannot be guaranteed.
- Colorado Attorney General’s Office
- Colorado General Assembly
- Federal Trade Commission
- FBI – Telemarketing Fraud
- Colorado Consumer Protection Act (CCPA): CRS 6-1-105; see also Crowe v. Tull, (Colorado Supreme Court, 2006) 126 P.3d 196; see also Shekarchian v. Maxx Auto Recovery, Inc., (Colo.App. 2019) COA 60, — P.3d —.
- Colorado Revised Statute 18-4-401(4). Prior to March 1, 2022, theft valued at less than $50 was a petty offense. SB21-271.
- CRS 18-6.5-102
- CCPA 6-1-114
- CCPA 6-1-112