Bill would let Colorado Secretary of State remove business filings tied to failed electronic payments

A bill that would give Colorado’s Secretary of State new authority to remove fraudulent or unpaid business filings cleared a Senate committee on a 5–0 vote. Sponsors said the change is intended to limit misuse of the state business registry by bad actors who file companies without paying.

Alex Goddard, director of government affairs at the Department of State, told the committee the office has worked with the Attorney General and legislators since 2022 to address business-identity theft. "Since that program went live in 2023, over 5,000 reported filings or entities have been fully investigated and marked as fraudulent in our business database," Goddard said, describing the measure as building on an earlier effort.

Under the bill described to the committee as "House Bill 26 10 88," the Secretary of State would be able to void or remove a business filing from the state database when an electronic payment for that filing does not go through (for example, when a chargeback or reversal indicates the payment was unauthorized). Sponsors said the change would also bar the use of a known fraudulent entity as a registered agent and would let the Attorney General contact other points of contact for an entity during fraud investigations.

Jeffrey Reester of the Department of Law testified that the offices had collaborated on the policy and that the bill would allow "upstream" action—batch cleanups, investigatory review and faster relief for victims. "It will empower the Secretary of State to work upstream, harms occur, but also before these business owners are impacted," Reester said.

Committee members pressed witnesses on how large batches of filings occur. Goddard said the filings are likely automated — "some automation, writing a script or something" — and that Colorado’s intentionally easy online filing process can be exploited.

The committee adopted several technical and investigatory amendments and then voted to advance the bill as amended to the Appropriations Committee with a favorable recommendation. The motion to advance passed 5–0. The committee did not take final action on the bill; the next step is consideration by Appropriations.