Colorado has ordered a medical-debt collector to seek removal of default judgments involving 44 consumer accounts after state investigators found the company had not supplied evidence required by Colorado law.
The attorney general announced the settlement with Wakefield & Associates, a Fort Morgan-based collection agency, on Sept. 23. Wakefield agreed to pay a $30,000 fine, stop the challenged practices and comply with the Colorado Fair Debt Collection Practices Act.
The enforcement action centers on cases in which a consumer did not answer a collection lawsuit and the company sought judgment without the documentation now required for medical debt. Colorado’s 2023 law requires a collector to identify the original creditor, itemize the charges and provide evidence of the debt before a court enters a default judgment.
According to the signed agency order, Wakefield identified 44 accounts without affidavits that the state considered compliant. The company disputed the administrator’s findings and denied liability, but agreed to resolve the investigation without an evidentiary hearing.
Wakefield must move to vacate any unsatisfied default judgments entered in the affected cases. It cannot seek new judgments until it sends fresh notices and files affidavits from authorized employees of the medical providers. That requirement is designed to establish the amount and nature of the claimed debt through admissible business records rather than an assignment document alone.
The order also addresses money already collected. If Wakefield does not pursue a new judgment supported by a compliant affidavit, it must refund payments received after entry of the earlier judgment. If documented amounts are lower than the total collected, excess payments must be returned. The company must provide the state an accounting of refunds within 91 days of the order’s effective date.
The underlying statute, Senate Bill 93, created several protections beyond courtroom documentation. It capped medical-debt interest at 3%, requires collection pauses when consumers request itemized statements and dispute validity, sets payment-plan notice rules and restricts collections while insurance appeals are pending. The law applies heightened judgment requirements to medical debt incurred on or after May 4, 2023.
For the 44 consumers, vacating a judgment matters because a default judgment can permit collection tools that are not available on an unproven claim. The settlement does not automatically erase every underlying bill. Wakefield may still seek payment or return to court if it supplies the notices and provider affidavits required by law.
The $30,000 payment goes to the state rather than directly to consumers. Individual financial relief will depend on whether judgments are vacated, whether Wakefield produces compliant evidence and whether prior payments must be refunded under the order.
The action is an early test of Colorado’s medical-debt documentation rules. Its practical message to collectors is that a consumer’s failure to answer a lawsuit does not remove the creditor’s obligation to prove the debt before obtaining a judgment.
