Damages Recoverable Under the WVCCPA
as published in West Virginia Banker, Winter 2011
Last quarter, we focused on the available defenses to West Virginia Consumer Credit and Protection Act, W. Va. Code § 46A-1-101 et seq. (“WVCCPA”) claims. This article, we will focus on the potential damages that a consumer can recover - actual damages, statutory penalties, and attorney’s fees.
First, a consumer would be entitled to actual damages – physical and/or emotional – that a creditor’s or debt collector’s alleged violations of the WVCCPA may have caused the consumer. Before being awarded actual damages, the consumer must provide and prove the allegations seeking actual damages with competent and corroborated evidence, such as medical bills.
Next, the consumer may be entitled to statutory penalties for violations of the WVCCPA. Courts have interpreted the WVCCPA to permit a separate statutory penalty to be imposed for each act violating the WVCCPA. The net effect is that in some circumstances each communication to a debtor may represent a separate violation of the WVCCPA and give rise to a separate penalty. The penalty under the WVCCPA to be imposed ranges from $100 to $1,000. However, the statutory penalty may be adjusted for inflation. The maximum amount of statutory penalty available as adjusted for inflation is currently $4,483.97. The fact-finder’s duty is to determine if the WVCCPA has been violated and the number of violations. The court, however, determines the amount of any statutory penalty.
In addition to actual damages and statutory penalties, a court may award the consumer all or part of their attorney’s fees and court costs. The consumer’s counsel will only be awarded attorney’s fees that are adequately documented and not found by the court to be excessive. Estimating the amount of attorney’s fees that ultimately may be awarded in any case is a difficult task. However, the federal courts in West Virginia assume that $18,000 is a reasonable conservative estimate of attorney’s fees and court costs in action alleging violations of the WVCCPA. Meanwhile, some state courts in West Virginia have awarded statutory attorney’s fees in the amount of one-third of the total statutory penalties.
While the penalties and damages under the WVCCPA may appear to be steep, attorney’s fees are available to a creditor or debt collector if the consumer’s claim was brought in bad faith and for the purposes of harassment. In this instance, just as for a consumer, the creditor or debt collector will only be able to seek attorney’s fees and costs that are adequately documented and not found by the court to be excessive.
In sum, damages available to a consumer under the WVCCPA can often be steep and costly for the creditor or debt collector whose actions are found to violate the WVCCPA, as consumers may recover actual damages, statutory penalties, and, possibly, attorney’s fees and court costs.
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