Committee advances business-filings fraud bill after AG and SOS back new complaint tools

The committee voted to move House Bill 10-88 to appropriations after testimony from the Department of State and the Colorado Attorney Generals office about an expanding problem of fraudulent business filings.

What the bill does: HB 10-88 adds administrative tools for the Secretary of States business-fraud unit and the Attorney Generals consumer-fraud unit. Changes include the ability to flag or void filings where an electronic payment is later reversed (a chargeback), to treat filings tied to known fraudulent registered agents as linked fraudulent entities, and to streamline the two-letter notice process that currently lengthens investigations.

Why supporters back it: The AGs office and Secretary of State staff told the committee their complaint-driven system has processed thousands of filings since 2023. "Since that program went live in February 2023, over 5,000 reported filings or entities have been fully investigated and marked as fraudulent in our business database," a Department of State witness said. The Attorney Generals office said a reduced redundant-letter requirement would speed relief and lower investigatory backlog.

Concerns and fix: Public witnesses warned the bill might allow dismissal of legitimate complaints because of broad language around relationships between complainants and targets. Sponsors accepted an amendment, L1, that removed or narrowed language that would permit dismissal solely because a complainant has a prior personal or professional relationship with the filer. The committee moved the bill to appropriations with a favorable recommendation; the transcribed vote was unanimous.

Next steps: The bill will go to the House Appropriations Committee for budgetary review; sponsors and agencies indicated some IT development and a small ongoing FTE would be needed to implement the chargeback-tracking elements.