West Virginia’s Legislature just concluded its 2015 session. Among the more than 260 bills sent to Governor Earl Ray Tomblin, is Senate Bill 542 (“S.B. 542”), which makes certain amendments to the West Virginia Consumer Credit and Protection Act (“WVCCPA”).
Debt Collection Provisions.
Section 46A-2-125 prohibits a debt collector from unreasonably oppressing or abusing a consumer in the collection of a debt. Currently, among the examples of oppressive and abusive behavior is a prohibition to “cause a telephone to ring or engag[e] any person in telephone conversation repeatedly or continuously.”
S.B. 542 removes “repeatedly or continuously” and creates a safe harbor for the debt collector. Rather than the violation being for “repeated or continuous” calls, it is a violation of the statute to call a person more than 30 times per week or engage a person in telephone conversation more than 10 times per week.
The statute still prohibits calls at unusual times, or times known to be inconvenient, with the intent to annoy, abuse, oppress or threaten the consumer. The debt collector’s conduct will be evaluated from the standpoint of a reasonable person. But, following the federal Fair Debt Collections Practices Act (“FDCPA”), unless there are extenuating circumstances, one can assume that calls after 8:00 a.m. and before 9:00 p.m. (at the consumer’s location) will not be considered unusual or inconvenient.
Section 46A-2-125 also listed the placement of a telephone call without disclosing the identity of the caller to be oppressive and abuse. That provision was changed to make the violation a failure to disclose the caller’s identity when “engaging any person in telephone conversation.”
Section 46A-2-126 prohibits a debt collector from unreasonably publicizing information related to the indebtedness or consumer. S.B. 542 clarifies that it is not a violation for the debt collector to identify herself to the debtor by name, to identify the debt collector’s employer, if expressly requested by the debtor, or to provide a telephone number or other contact information to the debtor. The bill also clarifies that it is not a violation for the debt collection to communicate with any person for the purpose of confirming or obtaining the consumer’s location, so long as the debt collector does so in compliance with the applicable provisions of the FDCPA. The filing of a complaint or other pleading with a court will not violate this statute.
Section 46A-2-128 prohibits unfair or unconscionable means to collect a debt, including the prohibition from communicating with a consumer whenever it appears the consumer is represented by an attorney. S.B. 542 removes “whenever it appears” and sets a more specific procedure and timeline for notice and for when communication must cease. It is now a violation if communication with a consumer continues 72 hours after the debt collector receives written notice, either on paper or electronically, from the consumer or his attorney, that the consumer is represented by an attorney specifically with regard to the subject debt. In other words, the notice must be in writing, it must relate to a debt identified in the letter, and the debt collector has 72 hours from notice to comply.
In addition, under S.B. 542, in order for the notice to be effective, it must state clearly the attorney’s name, address and telephone number, and it must be sent to the debt collector’s registered agent or, if not registered, to the debt collector’s principal place of business. Creditors and debt collectors will need to revisit their company’s procedures for processing mail received from a registered agent or received at the principal place of business to be certain a notice of representation is promptly noted on the account within the 72 hour window.
S.B. 542 also clarifies that regular account statements and notices provided under applicable law do not constitute prohibited communications under this section.
S.B. 542 increases the maximum delinquency charge or late fee per installment from $15.00 to $30.00. The late fee still cannot be imposed unless the full installment is not paid within 10 days of its due date.
Limitations and Statutory Penalties.
The statutory penalty provisions for violation of the WVCCPA now provide for (i) actual damages and (ii) a penalty of $1,000 per violation. The range and the minimum statutory penalty of $100 per violation are removed. The total penalty awarded cannot exceed the greater of $175,000 or the total alleged outstanding indebtedness. In a class action, the $175,000 limitation is to be applied severally to each named plaintiff, so that each named plaintiff may not recover more than $175,000 or the total alleged outstanding indebtedness.
In addition, S.B. 542 revised Section 46A-5-106, which is the provision that allowed statutory penalties to be adjusted for inflation. Per S.B. 542, the statutory penalty is “re-set” as of September 1, 2015, at 12:01 a.m., with the inflationary adjustment available after this date. In other words, the inflationary factor that previously could be applied after 1974 when the WVCCPA was originally enacted, is no longer available. An inflation adjustment can be made after September 1, 2015, on the statutory penalty of $1,000.
The current statute raised questions about the statute of limitations, which have been addressed by S.B. 542. After September 1, 2015, no action for violation of the WVCCPA may be brought more than four years after the violation has occurred, regardless of the type of credit.
The existing statute offered a safe harbor for creditors who discovered an error and corrected the error within 15 days prior to a suit being filed or receiving notice of a claim. S.B. 542 leaves the 15 days in place if the error affects no more than two persons, but changes it to 60 days if the error affects more than two persons.
S.B. 542 added a new section 46A-5-107 which addresses venue for civil actions brought by a consumer to recover actual damages or a statutory penalty for violation of the WVCCPA. Such actions must be brought in the circuit court of the county:
- in which the plaintiff has his legal residence at the time the civil action is filed;
- where the plaintiff last resided in West Virginia; or
- in which the debt collector or creditor has its principal place of business.
S.B. 542 was passed on March 14, 2015, and signed by the Governor on March 31, 2015. Except for those provisions specifically noted as becoming effective September 1, 2015, S.B. 542’s modifications will be effective 90 days from passage, or June 12, 2015.
Revision: The earlier version of this article (on page 1) reported that under the amended Section 46A-2-126, the debt collector would not violate the statute if it provided a telephone number or other contact information to the debtor if expressly requested by the debtor. However, the “if expressly requested by the debtor” phrase applies only to identifying the debt collector’s employer, not to providing a telephone number or other contact information.