Last quarter we focused on claims that can be asserted under the debt collection provisions of the West Virginia Consumer Credit and Protection Act, W. Va. Code §§ 46A-1-101 et seq. (the “WVCCPA”). This article will focus on the basic defenses available to creditors under the WVCCPA. Despite the “strict liability” feel to the claims consumers may assert under the WVCCPA, the defenses available to creditors may enable a creditor to avoid any liability for technically violating a section of the WVCCPA.
First, there is a limited time period within which claims may be brought under the WVCCPA. For cases related to revolving charge accounts or revolving loan accounts, no action may be brought more than four years after the alleged violation occurred.1 For cases involving consumer credit sales or consumer loans not made pursuant to a revolving account, no action may be brought more than one year after the due date of the last scheduled payment.2 Thus, a court will not hear a case for claims related to violations that occurred outside of the applicable one and four year periods.
Second, a defense exists if the creditor has timely remediated a violation or if the creditor’s violation was erroneous. If (1) the violation is discovered and corrected within 15 days, and (2) the consumer has not commenced a civil action or sent a cure demand, the creditor may not be held liable under the WVCCPA.3 Furthermore, there is no liability if a creditor can establish that the violation was unintentional or in error.4 A violation could be found to be unintentional or in error if the violation occurred as a result of the creditor’s adherence to its procedures that have been adapted to avoid that violation.5 It should be noted, however, that these defenses are not available to a creditor that has been sued in a common law action and not a specific action under the WVCCPA.6
Third, a defense also exists if the person does not meet the definition of a “consumer” under the WVCCPA. A “consumer” is the individual who owes, or who is alleged to owe, the debt at issue.7 Further, the WVCCPA is only available to an individual who incurred indebtedness through the purchase of items that were primarily for personal, household, or family.8
Fourth, defenses are available for each particular claim under the WVCCPA’s debt collection provisions if the plaintiff fails to meet all of the necessary requirements of that particular section. For instance, while section 2-128(e) prohibits communication with a consumer after attorney notification is given, the notification must provide either (a) the attorney’s name or address to be valid or (b) the attorney’s name and address are “easily ascertainable.” There is no guidance regarding what information makes an attorney’s name and address “reasonably ascertainable” but courts have found that if a customer provides information relating to an attorney, the debt collector has an obligation to attempt to communicate with the alleged attorney before resuming communications directed at the customer.9
Fifth, another defense is found in the Unfair and Deceptive Acts or Practices (“UDAP”) provisions of Article 6 of the WVCCPA that requires the consumer to follow statutory procedure before a claim will be considered valid. The UDAP provisions contain an express statutory prerequisite to a consumer bringing a private cause of action. A plaintiff may not commence a UDAP claim without first sending the intended defendant notice of the alleged violations claimed and giving the defendant at least 20 days from receipt of the notice to cure such violations.10 If the statutory notice was not given to the defendant, there is not an actionable cause of action under the UDAP provisions against that defendant.11
In addition to the defenses identified in the WVCCPA, common law defenses (such as laches, standing, comparative negligence, and waiver) also are available.
While the WVCCPA may feel like it applies “strict liability” on creditors for violations, creditors should rest assured that they do have a number of the defenses that they can assert under the WVCCPA to shield from liability. Next issue, we will focus on the damages that a person may be entitled to under the Act.
1 Id. at 5-101(1).
3 Id. at 5-101(7).
4 Id. at 5-101(8). This defense in the WVCCPA contains a significant difference from the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. (“FDCPA”). Under the FDCPA, the defense is available if the violation is unintentional and the result of a bona fide error of fact notwithstanding the maintenance of procedures reasonably adapted to avoid any such violation or error. Under the WVCCPA, the defense is phrased in the disjunctive, thereby creating two defenses (the violation was unintentional or the result of a bona fide error of fact notwithstanding the maintenance of procedures).
6 Syl. pt. 1, Casillas v. Tuscarora Land Co., 186 W. Va. 391, 391-92, 412 S.E. 2d 792, 792-93 (1991).
7 W. Va. Code § 46A-2-102(12); see Mem. Op. and Order, Payne v. Green Tree Servicing LLC, 2:05-cv-00293 (S.D.W. Va. March 7, 2006).
8 W. Va. Code § 46A-2-122(b).
9 Id. at 2-128(e).
10 Id. at 6-106(b). However, one judge in Raleigh County, West Virginia, recently ruled that a plaintiff may commence litigation without first sending the required notice and that the statute can be satisfied by merely staying the litigation for 20 days.
11 Perry v. Tri-State Chrysler Jeep, LLC, No. 3:08-0104, 2008 WL 1780938, at *4 (S.D.W. Va. April 16, 2008).