Pub. 1 2010 Issue 4

www.wvbankers.org 20 West Virginia banks have recently become the targets of lawsuits filed by customers in default on their loans for alleged violations of consumer laws based on repeated telephone calls by the bank to the borrower. P articularly troubling are recent claims involving a lender’s unan- swered phone calls to a delinquent borrower. In these cases, plaintiffs’ attorneys provide their clients with a “caller I.D.” device that tracks the num- ber of calls and the time of day that the calls are made. Courts in West Virginia have held that unanswered, auto-dialed calls to the residence of a borrower are “communications” within the meaning of the West Virginia Consumer Credit Protection Act (“WVCCPA”), exposing lenders to potentially significant liability. These cases can have serious conse- quences for banks. If a borrower is able to prove that the bank’s activities in collecting on the debt have violated the WVCCPA, then the consumer may be entitled to statutory damages, attorneys fees and cancellation of the debt. Violations of the WVCCPA carry a maximum fine of $1000 per violation (which may be adjusted by the con- sumer price index), and the method by which a court calculates damages aris- ing from multiple violations can subject a bank to substantial monetary liability. The recovery can be significant if the borrower can show the bank made a number of unanswered, auto-dialed calls. One case filed in West Vir- ginia involved in excess of 200 hundred phone calls to the borrowers residence. WVCCPA Provisions At issue are two provisions of the WVC- CPA, one that prohibits communication with a borrower who is represented by an attorney and another that prohibits abusive conduct including repeated phone calls. First, W.Va. Code §46A-2-128(e) provides that the following conduct constitutes unfair or unconscionable means to collect or attempt to collect any claim: Any communication with a con- sumer, whenever it appears that the consumer is represented by an attorney and the attorney’s name and address are known, or could be easily ascertained, unless the attorney fails to answer correspondence, return phone calls or discuss the obligation in question or unless the attorney consents to direct communication. Second, W.Va. Code §46A-2-125 pro- vides that: No debt collector shall unreason- ably oppress or abuse any person in connection with the collection of or attempt to collect any claim alleged to be due and owing by that person or another. Without limiting the general application of the foregoing, the fol- lowing conduct is deemed to violate this section: (d) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continu- ously, or at unusual times or at times Technology May Assist Borrowers in Holding Banks Liable for Excessive Phone Calls By Sandra M. Murphy, Esq. and Amy J. Tawney, Esq. Bowles Rice McDavid Graff & Love LLP