In the past several years, there has been an increase in cases asserting claims under the West Virginia Consumer Credit and Protection Act, W. Va. Code § 46A-1-101, et seq. (“WVCCPA”) relating to illegal debt collection. The success of early suits has lead to an increased number of these lawsuits. Thus, West Virginia-based financial institutions should endeavor to learn about the intricacies of the WVCCPA and, if not already in place, develop policies, procedures, and training programs to ensure they are not violating the WVCCPA when they are collecting debts from consumers in West Virginia.
Over the next several quarters, we will be providing information on the WVCCPA and how it relates to collection efforts by financial institutions. We will begin with an overview of the WVCCPA, review each of the individual sections, and finish with recommendations and considerations for the future. The WVCCPA can significantly impact the way any financial institution does business, making an understanding of the WVCCPA’s provisions and how litigants utilize the WVCCPA’s provisions when asserting claims against financial institutions paramount.
Overview Of The Debt Collection Provision Contained Within The WVCCPA
The WVCCPA was passed into law in 1974 and is incredibly consumer-friendly. The WVCCPA applies to consumer loans, credit sales, and leases.1 It proscribes the maximum charges and fees that may be imposed on accounts.2 The collection provisions3 apply to all debt collection activity – whether done by third-party collectors or creditors/issuers seeking to collect against their customer.4 In connection with collecting on a debt, the WVCCPA prohibits: (1) threats and coercion5; (2) oppression and abuse6; (3) unreasonable publication7; (4) fraudulent, deceptive, or misleading representations8; (5) unfair or unconscionable conduct9; (6) postal violations10; and (7) deceptive or oppressive telephone calls.11 Each of these sections contains a non-exhaustive list of activities that are prohibited under the WVCCPA.
Next quarter’s article will focus on an analysis of the types of claims typically asserted under the WVCCPA.
1W. Va. Code § 46A-1-104 (“This chapter applies if a consumer, who is a resident of this state, is induced to enter into a consumer credit sale made pursuant to a revolving charge account, to enter into a revolving charge account, to enter into a consumer loan made pursuant to a revolving loan account, or to enter into a consumer lease [ ], and the goods, services or proceeds are delivered to the consumer in this state, and payment on such account is to be made from this state.”); W. Va. Code § 46A-1-102 (including definitions of the types of transactions subject to the Act).
2Id. at 1-103, 2-115, 3-101 -109, 3-112 -117.
3Id. at 2-122 -129a.
4Id. at 2-122(c-d) (“debt collection” is defined as “any action, conduct or practice of soliciting claims for collection or in the collection of claims . . . alleged to be owed or due by a consumer” and “debt collector” is defined as “any person or organization engaging directly or indirectly in debt collection”; See Thomas v. Firestone Tire & Rubber Co., 164 W. Va. 763, 266 S.E.2d 905 (1980).
5W. Va. Code § 46A-2-124 (including, but not limited too, (a) the use or threat of violence, (b) threat or accusation of threat that a person has committed a fraud or crime and that would tend to disgrace the person accused, (c) false accusations of failure to pay, including information reported to a credit agency, and (d) threatening arrest or garnishment without first explaining that judicial order must be in effect).
6Id. at 2-125 (including (a) using obscene or profane language, (b) a caller’s failure to identify themselves and with the intent to annoy, harass or threaten the person called, (c) causing a person to incur charges by concealing the purpose of the communication, and (d) causing a phone to ring or talking to a person at inconvenient times with the intent to annoy, harass, or threaten a person).
7Id. at 2-126 (including, but not limited too, (a) impermissibly disclosing indebtedness to an employer outside of legal proceedings and (b) impermissibly disclosing indebtedness to a family member).
8Id. at 2-127 (including, but not limited too, (a) using a false business name, (c) failure to disclose the name and address of the business that has been assigned the claim or to whom the claim is owed, (d) false representations about the “character, extent or amount of a claim” or the status of legal proceedings, and (g) statements that the debt may be increased by various fees that cannot legally be added to the debt).
9Id. at 2-128 (including, but not limited too, (c) collecting or attempting to collect all or part of a collector’s fee, (d) collecting or attempting to collect fees or charges not permitted by the agreement, and (e) communicating with a consumer that is represented by an attorney, whose name and number are known or could easily be discovered).
10Id. at 2-129 (stating that a collector shall not remit any communication that “violates or fails to conform to United States postal laws and regulations”).
11W. Va. Code § 46A-2-129a (making it impermissible to claim that a call is “’urgent’ or an ‘emergency’”).