Private Investigators
March 19, 2011
By Jerry Kopel
You remember the movie. Humphrey Bogart
chain-smoker who keeps a bottle of Scotch in his left hand drawer, sitting
in his dilapidated office, with a good- hearted babe receptionist in the
outer office. Suddenly the door opens, and there is Ingrid Bergman, a
beautiful dame who needs a private eye.
Private investigators (PIs)
and private detectives (PDs) were regulated by the state beginning in 1877
until 1977. In 1977 the state Supreme Court ruled in People vs Ro'Mar,
559 P2d 710, the statute was unconstitutional because it lacked a valid
definition of what entities had to be licened as PD agencies. Some several
hundred PIs or PDs then holding licenses became unregulated. In 1984 the
PI - PD language was removed from the statutes.
In 1976 the
legislature adopted the nation's first Sunset Law to consider what
occupations needed to be continue to be regulated. There is a Professional
Private Investigators Assn. of Colorado (PPIAC) which has filed
applications to obtain PI licensure. They tried in 1985, again in 1987,
again in 2000, and again in 2006. Each time the Dept. of Regulatory
Agencies (DORA) recommended no change in the law.
DORA's position
in the four applications has been (1) few complaints against the persons
in the occupation and (2) opposition within the profession from
significant PIs who see the re-regulation as a way to reduce competition.
By 2012 the profession expects 600 PIs. Only 26 percent of PIs are members
of PPIAC.
Twenty-seven former Federal Bureau of Investigation
agents who had to retire at reaching age 57 practice now in Colorado as
PIs. In 2000 as members of the Society of Former Special Agents of the FBI
they voiced their objections to the proposed licensing bill, listing the
27 members on the letter. What position they take in 2011 has not been
revealed in the DORA report.
DORA's words in 2006: "this review
finds insufficient evidence of harm to the public from the unregulated
practice of the PIs to warrant state licensing ... State licensing can
significantly restrict competition by reducing the number of competitors
and increasing business compliance costs, thus increasing costs to
consumers. In addition state licensing increases the cost of government."
The 2011 DORA research did conclude in favor of less regulation than
licensing. "Most importantly" wrote DORA "regulation in any form, is
intended to provide protection to consumers instead of enabling
practitioners,, in this case PIs, to gain access to personal information..
Here are the three standards which either support or deny a need to
regulate.
(1) According to the state Attorney General staff, during
the last five years (or since the 2006 denial) there were five complaints
filed against PIs or PI companies. Three of the complaints were fee
disputes (not a licensing violation). One involved fraud and identity
theft, and one involved misrepresentation.
The Denver/Boulder BBB reported 28 complaints against PIs in the past
three years of which 14 were for PI company failure to complete
agreed-upon service and five were forms of false advertising . "According
to BBB staff, fewer complaints regarding PIs are received compared to
other professions".
DORA then states" "The limited number of
complaints and the current process utilized by the BBB further calls into
question the extent of consumer harm, and therefor the need for licensure,
as highlighted in the Sunrise application."
(2) The second standard
is "will the public benefit by having the PI tested as to knowledge of
existing laws which are violated?" That could be part of any registration
form without licensing being involved.
(3) The third standard is
"can the public be adequately protected by other means in a most cost
effective manner." The researcher believes creation of a state registry
may be a viable option to enhance consumer protection.
The DORA
report did not focus on licensing especially since "harm to a lot of
consumers" was not shown. "If it ain't broken, don't fix it," remains a
good approach.
Cities or counties presently have the right to
license and Durango does license five PIs.
A statewide registry
form of regulation could eliminate persons who have commited crimes, who
fail a jurisprudence exam regarding state laws relevant to PIs, and who
lack a surety bond or errors and omission insurance.
The proposed
law change by PPIAC is HB 1195, a voluntary licensing law sponsored by
Rep. Bob Gardner (R) and Sen. Linda Newell (D) which by its title
"Concerning the Voluntary Licensure of Private Investigators" cannot be
amended to deal with a registry form of regulation. It would definitely
reduce competition and increase costs to the state government.
(Jerry Kopel served 22 years in the Colorado House.)
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