The West Virginia Consumers Credit and Protection Act (WVCCPA) was originally passed in 1974 as a measure against abusive and deceptive debt collection practices. It has since been amended several times, most recently in the 2015 first session of the 82nd West Virginia Legislature.
Senate Bill No. 542 is an amendment that made significant changes to several sections of the WVCCPA. The bill, which was signed into law by Governor Tomblin on March 31, will go into effect on June 12; however, certain provisions of the bill will not become applicable until September. The bill seems to focus on issues that are frequent claims litigated in West Virginia courts, such as how many phone calls per week constitutes a violation and appropriate times for communicating with consumers.
There are two major changes that will be particularly significant to day-to-day debt collection operations. The first is that the bill states that notifications of attorney representation must be made in writing (either on paper or electronically) and sent to either the West Virginia Secretary of State or the collector’s place of business.
Section 46A-2-128 formerly stated that collectors should cease communication with a consumer “whenever it appears” they are represented by an attorney. This was often ambiguous and could constitute anything from a brief phone call or voice mail to an e-mail. However, the amendment sets a more specific procedure and timeline and offers a 72 hour grace period after the collector receives the written notice from the consumer or his or her attorney. This will help collectors avoid unnecessary fines for violating the WVCCPA and federal standards.
For example, let’s say a collections firm or agency had an automated outgoing call set up to contact a consumer on Saturday morning, and the firm received notice that the consumer had obtained an attorney on Friday afternoon. In the past, if the automated call was not canceled, the firm would be fined for violating the consumer’s rights. However, with the recent amendment, the firm has 72 hours to comply after receiving the written notice.
In addition, Senate Bill No. 542 revised Section 46A-5-106, which previously allowed statutory penalties to be adjusted for inflation. Per the amendment, the penalty will be reset as of September 1, 2015. The new fixed penalty of $1,000 per violation will no longer be subject to the inflationary standards originally imposed in 1974; however, a new inflationary standard may be imposed after September 1. An across-the-board four-year statute of limitations will be imposed on WVCCPA penalties as well.
These changes signify a significant change in the nature of debt collection legislation. Up until this point, most regulations have been made with the objective of protecting consumers, but recent changes demonstrate a shift toward assisting the collections industry, which over time will benefit the state and its economy.