Amendments to the West Virginia Consumer Credit Protection Act, West Virginia Code § 46A-1-101 (WVCCPA) took effect on June 1, 2015. Passed in March, the amendments revise several sections of the WVCCPA, including significant changes to statutory penalties and clarification on prohibited debt collection phone calls. While the changes signal a move closer towards the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 (FDCPA), which affords certain protections to creditors, there remain significant distinctions that can pose a trap for the unwary business that crafts debt collection policies that only comply with the FDCPA.
Creditor Collecting Its Own Debt Is Not Excepted
A significant distinction between the WVCCPA and the FDCPA remains unchanged with the new amendments. Under the FDCPA, a creditor that collects its own debts is not a “debt collector,” and therefore is exempted from the requirements of the FDCPA. 15 U.S.C. § 1692(a)(6). The proposed language to square the WVCCPA and the FDCPA in this respect was not included in the amendments. As a result, in West Virginia, a creditor collecting in its own debt (including a bank) is subject to all of the requirements of the WVCCPA. W. Va. Code § 46A-2-122(d).
Statutory Penalties Streamlined and Capped
While the penalty for a single violation is still capped at $1,000, the amendment imposes an overall cap on penalties. Under Sections 46A-5-10(1) and 46A-5-10(4), individuals, or any individual member of a class, can recover an aggregate amount up to the greater of $175,000 or the total alleged outstanding indebtedness.
However, creditors and debt collectors can avoid liability for such penalties under section 46A-5-101(5). If the creditor has not received written notice of the error, and the creditor notifies the persons involved either (a) within fifteen days if the error affects no more than two persons or (b) within sixty days if the error affects more than two persons, the creditor will not be penalized. The WVCCPA previously enforced a flat fifteen day standard timeframe for all groups, regardless of size.
Sections 46A-5-101(1) and (2) extend the statute of limitations from one year to four years for all actions filed on or after September 1, 2015. This is a shift from the previous law, which had a separate, one year statute of limitations for certain consumer credit sales and consumer loans.
Clarification on Debt Collection Phone Call Regulations
Previously, section 46-2-125(d) prohibited collectors from calling borrowers “repeatedly or continuously,” or “at unusual times or at times known to be inconvenient.” The new law clarifies the previous, vague language. Specifically, calling any person more than thirty times a week, or engaging that person in a telephone conversation more than ten times a week, will be considered abusive. In line with the FDCPA, the WVCCPA also explains that calls made before 8 a.m. or after 9 p.m. in the consumer’s time zone will be considered to have been made at an unusual or inconvenient time.
Additionally, the revised section 46-2-125(b) is more lenient. Prior to the amendment, merely placing a phone call without disclosing the caller’s identity was sufficient to violate the law. Now, a caller is safe unless he or she engages in a conversation without disclosing his or her identity.
The amendment also adds safeguards for collectors contacting consumers represented by an attorney. Previously, section 46-2-128(e) barred any communication with a consumer that appeared to have an attorney when the name and address of the attorney was known or could be easily verified. Now, the law requires consumers to send written notice clearly stating the attorney’s name, address and telephone number to the debt collector’s registered agent or principal place of business. Furthermore, collectors have a seventy-two hour window after receipt of notice before they must cease communications. Under the new law, regular account statements do not constitute prohibited communications.
Other Changes: Unreasonable Publication and Late Fees
The amendment also limits the definition of unreasonable publication of information related to indebtedness under section 46A-2-126. Collectors do not violate this section if they identify themselves to the debtor by name, identify the collector’s employer, or provide their phone number or contact information to the debtor. Moreover, the section clarifies that creditors and debt collectors may communicate with others for the purposes of acquiring and confirming the consumer’s location information, provided that they follow the protocol set forth in the FDCPA.
Section 46-A-128(b) has been simplified, allowing debt collectors to seek affirmation of an obligation from consumers who have declared bankruptcy, as long as they follow applicable banking law.
Though previously silent on the issue of venue, newly added Section 46A-5-107 instructs that all claims should be brought either in the circuit court of the county in which the borrow has legal residence at the time of the action, or the circuit court of the county where the borrower last resided in the state of West Virginia. Borrowers may also bring claims in the West Virginia county where the creditor or debtor has its principal place of business.
While West Virginia has made significant favorable changes, moving it somewhat closer to the FDCPA, there remains significant potential for violation for the unwary business.