The Colorado Supreme Court repeatedly pressed a debt collection company last week to explain how its lawsuit against a Boulder woman for an unpaid credit card balance complied with the specific requirements that state lawmakers have created.

Portfolio Recovery Associates, LLC filed a complaint to collect on a $671 debt from the credit card account of Felicia Wright. It alleged Wright failed to pay the amount to Comenity Bank, who later sold the account to the debt collector. Wright, in turn, filed claims alleging PRA violated the Colorado Fair Debt Collection Practices Act.

Specifically, lawmakers have outlined what a creditor needs to include when they bring a legal action against a debtor. The creditor must attach the “contract, account-holder agreement, or other writing” that shows the original debt, if such documentation exists. The materials also must show an “unbroken chain of ownership” if ownership of the debt changed hands.

Problematically for PRA, the bill of sale it attached to its complaint against Wright lacked specific documentation about her account, beyond the statements of a single employee.

“How did you comply with that?” asked Justice Brian D. Boatright during the March 10 oral arguments. “Is PRA the owner of the debt? Where is that attached to the complaint?”

“Isn’t the purpose of this statute to connect the dots for the consumer?” added Justice Susan Blanco. “How did you give proper notice to this individual who PRA even is?”

Attorney Frederick R. Yarger, representing PRA, argued that the law, broadly, is intended to ensure a fair process for everyone. He said PRA gave notice to Wright about the debt, and there was no deception in her case.

Lawmakers’ goal in requiring certain information from debt collectors is to allow consumers to “make a reasonable decision about what to do: whether to contest it or whether to seek a settlement of the debt,” Yarger said. “There’s really no other information that can be provided that allows a debtor to make a different decision.”

However, the court was skeptical that lawmakers intended debt collectors to abide by the spirit of the law alone.

“Given these pretty robust and specific requirements with the pleadings, and given the consequences of failing to comply with everything in the statute,” said Chief Justice Monica M. Márquez, “tell me where you look to in the statute to discern where the General Assembly was good with ‘close enough.'”

After a trial, Boulder County Court Judge Jonathon P. Martin found PRA was the owner of Wright’s debt, despite “ambiguities, even inconsistencies in the attached documents.” He also declined to find PRA in violation of Colorado’s debt collection law.

District Court Judge J. Keith Collins upheld that ruling on appeal. He agreed PRA’s documentation of the debt “contained some ambiguity,” but that Martin had “considered the inconsistencies in the documents and the reliability of the documents when making its findings that the inconsistencies (do) not undermine the authenticity.”

Wright then appealed to the Supreme Court, asking it to review the conclusion that PRA had complied with the law and was allowed to collect on the debt.

Multiple outside entities weighed in on Wright’s appeal.

ACA International, an association of debt buyers and collectors, argued that requiring a signed agreement to be attached to a court complaint “would actually hinder debt collectors/buyers acting in good faith in their attempt to collect validly owed debt by creating an additional hurdle in the already highly regulated debt collection process.”

“Any creditor, including debt buyers, should be expected and required to come to court prepared, just like claimants in other cases,” countered a group of consumer and legal advocacy organizations, including Colorado Legal Services and the National Consumer Law Center.

Justice Richard L. Gabriel asked Wright’s attorney whether the legislature intended for debt collectors to attach the original agreement when a consumer applies for a credit card.

“What if she buys an item four months later on this credit card and there’s a challenge?” he wondered. “It would seem to me the original application would not evidence the debt at issue.”

Justice William W. Hood III also worried about prioritizing the technical requirements of the law over its seeming purpose.

“If the objective is to give a debtor notice of the debt, then that happened here,” he said. “How is anything that they’re doing abusive?”

However, Boatright observed the materials PRA included showed that Wright owed money to her credit card company, and not that she owed anything to PRA.

“Today on my cell phone, I got a notice that I have an unpaid parking ticket and I owe so-and-so money,” he said. “It was clearly spam. But they sent me a notice. Is that proof that I owe them?”

“If you attached even one line that showed the last four digits of Ms. Wright’s account number, you’ve got a stronger case,” added Gabriel. “How does the bill of sale show that PRA owns Ms. Wright’s debt?”

The case is Wright v. Portfolio Recovery Associates, LLC.