Pub. 2 2011 Issue 1

www.wvbankers.org 18 I n the past several years, there has been an increase in cases asserting claims under the West Virginia Con- sumer 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 in- creased number of these lawsuits. Thus, West Virginia-based financial institu- tions should endeavor to learn about the intricacies of the WVCCPA and, if not already in place, develop policies, proce- dures, and training programs to ensure they are not violating the WVCCPA when they are collecting debts from consumers in West Virginia. Consumer Protection: West Virginia Debt Collection Provisions By Angela L. Beblo, Esq. and Patrick R. Barry, Esq., Spilman Thomas & Battle, PLLC Overview Of The Debt Collection Provision Contained Within The WVCCPA The WVCCPA was passed into law in 1974 and is incredibly consumer-friend- ly. 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 provisions 3 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 collect- ing on a debt, the WVCCPA prohibits: (1) threats and coercion 5 ; (2) oppression and abuse 6 ; (3) unreasonable publica- tion 7 ; (4) fraudulent, deceptive, or misleading representations 8 ; (5) unfair or unconscionable conduct 9 ; (6) postal violations 10 ; and (7) deceptive or op- pressive 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. Q 1 W. 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). 2 Id. at 1-103, 2-115, 3-101 -109, 3-112 -117. 3 Id. at 2-122 -129a. 4 Id. at 2-122(c-d) (“debt collection” is defined as “any ac- tion, 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 collec- tion”; See Thomas v. Firestone Tire & Rubber Co., 164 W. Va. 763, 266 S.E.2d 905 (1980). 5 W. 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). 6 Id. 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). Over the next several quarters, we will be providing information on the WVCCPA and how it relates to collection efforts by financial institu- tions. 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 finan- cial 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. Q Debt Collection — continued on page 23