Pub. 9 2018 Issue 2

www.wvbankers.org 24 West Virginia Banker F or decades, consumer protection has led to copi- ous amounts of litigation in West Virginia. In the past several years, the types of lawsuits filed under the debt collection provisions of the West Virginia Consumer Credit and Protection Act, W. Va. Code §§ 46-1-101 et seq. ("WVC- CPA") have transformed. Banks that operate in West Virginia should be aware of these changes, especially if those banks seek to collect their own debt or refer that debt to third-party agencies. An Increase in Class Actions Until several years ago, the vast majority of consumer cases involved a single plaintiff. For every potential violation of the WVCCPA by a bank or creditor, a consumer could receive a penalty of approximately $4,700, making individual cases lucrative for both consumers and their attorneys. Recent amendments to the WVCCPA decreased that statutory pen- alty to approximately $1,050, thereby reducing the appeal of single-plaintiff lawsuits. As a result, there has been an influx of class action lawsuits. Those lawsuits involve rights of class members who aren't present in the lawsuit, and a court has extra duties to ensure that the class members are treated fairly. This leads to higher defense costs as a result of increased time, motions practice, and other litigation expenses. The West Virginia Collection Agency Act ("CAA") The CAA requires collection agencies to obtain a license, post a bond, and maintain an office in West Virginia. Where an entity's compliance with the CAA is called into question, we have seen lawsuits allege that every collection letter and call that the defendant made violates the WVCCPA prohibi- tion against misrepresentations. The consumers' theory is that a collection attempt carries with it an implicit representa- tion that the defendant has complied with the CAA. West Virginia banks and other creditors need to be aware of these lawsuits because consumers sometimes will sue both the What Bank Litigators Want Banks to Know About the State of Consumer Protection Litigation in West Virginia By Tai C. Shadrick and Nicholas P. Mooney II Spilman Thomas & Battle