Consumer Finance Litigation

The West Virginia Senate Judiciary Committee and the West Virginia Senate recently approved amendments to the West Virginia Consumer Credit and Protection Act ("WVCCPA"), West Virginia Code §§ 46A-1-101 et seq, which was last amended in 2015. While the original versions of the senate bills sought to make the WVCCPA more similar to the federal Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq., the committee substitute of S.B. 563 includes only minor amendments. Among other things, the proposed amendments:

• Clarify how notice of attorney representation must be given to creditors;
• Require the statute of limitations disclosure on all written communications; and
• Require consumers to send notice of right to cure.

The bill has been passed out of the Senate Judiciary Committee, and the Senate voted 24-10 to approve the bill on March 29, 2017. The bill is currently before the House and will need to be approved by the House and signed into law by the Governor before it becomes effective. (Update: On April 5, 2017, the House passed the Bill in a 72-28 vote, and on April 21, 2017, Governor Jim Justice signed the Bill into law.)

Clarification on How Notice of Representation Must Be Sent

Under the current version of § 46A-2-128(e), debt collectors are prohibited from communicating with consumers more than 72 hours after the debt collector receives written or electronic notice that the consumer is represented by an attorney with regard to the subject debt. Pursuant to the 2015 amendments, such notice must clearly state the attorney's name and contact information, and be sent to the debt collector's registered agent or the debt collector's principal place of business. The proposed amendment, however, states that notice of attorney representation must be sent in writing by certified mail, return receipt requested, to the debt collector's registered agent or its principal place of business, which eliminates any potential ambiguity about how notice must be sent. Additionally, S.B. 563 changes the 72-hour period to three business days, giving creditors additional time to take precautionary measures after receiving a consumer's notice of representation.

Statute of Limitations Disclosure

Currently, the WVCCPA requires debt collectors to inform consumers that the debt is time-barred in its initial written communication to the consumer. Senate Bill 563 amends § 46A-2-128(f) to require the statute of limitations disclosure on all written communications. The required disclosure language has not changed.

Notice of Right to Cure

The Senate Judiciary Committee also added § 46A-5-108, which provides that a consumer may not bring an action unless he or she has sent written notice of right to cure by certified mail, return receipt requested, to the creditor or debt collector. Written notice must be sent to the debt collector's registered agent or its principal place of business, if it is not registered with the West Virginia Secretary of State. Section 46A-5-108 prohibits the consumer from filing an action for 45 days after the debt collector receives notice of right to cure, and further provides that the consumer has 20 days from the date of the cure offer to accept it. Once a consumer accepts, the debt collector then has 20 days to begin to effectuate the cure and it must be completed within a "reasonable" time. The amendment also authorizes the consumer to file suit, if the debt collector fails to timely effect the cure offer. Notably, proof that a cure offer was made, accepted, and performed operates as a complete defense to certain actions under the WVCCPA.

Applicability and Effective Date

The Senate Judiciary Committee also amended § 46A-8-101, which addresses the applicability and effective dates of the proposed amendment. Subsection (d) provides that the amendments made during the 2017 regular session to § 46A-2-128 will apply to all causes of action accruing on or after the effective date of the amendments. The 2017 amendments to § 46A-5-108 will apply to all causes of action filed on or after the effective date of the amendments.

Conclusion

While the 2017 amendments are not as drastic as the original bill to mirror the FDCPA, the amendments are still beneficial for creditors and debt collectors. Specifically, the WVCCPA will require consumers to meet procedural requirements (such as filing a notice of right to cure) before filing suit. Additionally, creditors and debt collectors can shield themselves to certain WVCCPA claims by fully performing an accepted cure offer. Creditors and debt collectors will also benefit from the WVCCPA's requirement that notice of attorney representation must be sent via certified mail, return receipt requested, as any ambiguity about how notice must be sent is eliminated. The 2017 amendments also give creditors and debt collectors additional time to comply with a consumer's notice of attorney representation.