The Colorado Supreme Court in an unanimous yesterday reversed a lower court decision and holding that a debt buyer violated the Colorado Fair Debt Collection Practices Act (CFDCPA) when it filed a collection complaint without properly documenting its ownership of the specific debt it sought to collect.
The background: The defendant, a debt buyer, filed suit in county court to recover $671.29 in credit card debt originally owed to a bank. With its complaint, the defendant included three attachments: a bill of sale between itself and the original creditor, two credit card statements previously sent to the plaintiff, and an affidavit from its own custodian of records attesting that the plaintiff’s specific account had been sold and transferred to the defendant. The problem was in the details.
- The bill of sale referenced an attached asset schedule, but that schedule was blank. The plaintiff’s account number and unpaid balance appeared nowhere in the document.
- The plaintiff countered that the defendant had failed to comply with section 5-16-111(2)(b) of the CFDCPA, which requires debt buyers to attach “a copy of the assignment or other writing establishing that the debt buyer is the owner of the debt.”
- She further argued she was entitled to damages, costs, and attorney fees under the Act.
- Both the county court and the district court ruled in the defendant’s favor, with the county court reasoning that the bill of sale was sufficient and the affidavit served as a permissible supplement.
- The plaintiff then petitioned the Colorado Supreme Court, which agreed to hear the case.
The ruling: The Supreme Court reversed the lower courts’ rulings, finding that while the bill of sale showed the defendant had purchased some debt from the original creditor, it did not establish that it had purchased the plaintiff’s debt specifically.
- As the court put it, “Although the bill of sale establishes that [the defendant] purchased some debt from [the original creditor], it does not establish that [the defendant] purchased [the plaintiff’s] debt.” That distinction was fatal to the defendant’s position.
- The court further held that the defendant could not use its custodian affidavit to patch the gap. The CFDCPA expressly provides that “in the absence of evidence required by subsection (2)(b), an affidavit does not satisfy the requirements of this subsection.”
- The court was direct: allowing the affidavit to cure the noncompliant complaint would render that statutory provision meaningless. Because the complaint failed to independently satisfy subsection (2)(b), the affidavit could not rescue it.
- The court remanded the case for consideration of damages, costs, and attorney fees owed to the plaintiff.
