Change to the West Virginia Consumer Credit and Protection Act

Change to the West Virginia Consumer Credit and Protection Act
by Riley Rodgers

By Riley Rodgers

The West Virginia General Assembly recently enacted positive changes to the West Virginia Consumer Credit and Protection Act (WVCCPA). The new amendment requires a consumer to notify the creditor of an alleged violation and permit the creditor a chance to correct before any action may be brought pursuant to the WVCCPA. Further, there are now codified factors the court must examine in awarding any attorney fees. Highlights of the newly enacted changes are summarized as follows:

Attorney’s fees (§46A-5-104)

This new addition requires courts to examine detailed factors when awarding attorney fees to the consumer in a counterclaim action. More interestingly, the WVCCPA now allows for attorney’s fees to be awarded to counterclaim defendants (the creditor or its counsel) if the court finds that the counterclaim was brought in bad faith or to harass. KWA is hopeful this will deter some of the “shotgun” litigation and frivolous counterclaims we have seen in the past.

Private Causes of Action (§46A-6-106)

This amendment allows for a consumer to bring a private action if they purchase or lease goods and are injured as a result of a violation of the WVCCPA. For a consumer to prevail and be awarded damages, they must prove actual out of pocket losses proximately caused by an affirmative representation or an omission of information in violation of the WVCCPA. Recovery is limited to the greater of actual damages or $200 and, where appropriate, equitable relief.

Right to Cure (§46A-5-108)

In summary, this section was amended to state the debtor may not bring an action predicated on an Article 2 (Consumer Credit Protection), Article 3 (Finance Charges), Article 4 (Regulated Consumer Lenders), and/or Article 6 (General Consumer Protection) until 45 days after the consumer has informed the creditor, in writing and by certified mail, return receipt requested, of the violation. The notice must be sent to all opposing parties either through their registered agent with the Secretary of State, or, if no agent is registered, at the principal place of business. The consumer then has 20 days upon receipt of the cure offer to accept or it is deemed refused. If a cure offer is accepted, the creditor has 20 days to begin effectuating the cure and must complete the cure in a reasonable time. If the creditor fails to complete the cure timely, the consumer can file suit under the WVCCPA. If the creditor completes the cure, it is a complete defense and the creditor is entitled to attorney fees if the debtor files suit.

Offers to settle or of judgment; damages for frivolous claims or defenses (§46A-5-109)

This section is brand new to the WVCCPA, and arguably the most important of the changes. This section gives concrete guidelines to parties regarding offers of settlement, how to reject a settlement, and the ability to petition and collect on frivolous claims.

Thirty days after the complaint is served, either party may make a written offer to settle the case. Offers must be specific and state with all particularity the terms, including a breakdown of damages and fees. All written offers must be sent by certified mail, RRR, or similar national carrier. The offer from either party must stay open for 14 days unless a written withdrawal is served on the offeree prior to acceptance. If a party does not accept or reject an offer within the 14 day window, the offer will automatically be considered rejected. Note that any offer made in hopes of settlement will render any offer prior to that null and void, including a previous cure offer. If the defendant makes an offer that plaintiff rejects, and court rules that the defendant is liable, the plaintiff is not necessarily entitled any fees or expenses.

A defendant may petition the court for damages on the grounds of frivolous claim or defense raised by plaintiff and the court will hold a bifurcated hearing to determine whether there was a frivolous claim or defense, and to calculate damages, if any, against the offending party.

This is a significant change in the WCCPA and levels the playing field.  It gives a creditor a chance to right a wrong.  It gives a creditor an opportunity to petition the court for attorney fees if a frivolous claim is brought.  Recall also that in 2015, the West Virginia legislature clarified the ability to contact a debtor by phone (WVC §46A-2-125 amended in 2015).  The environment in West Virginia continues to change favorably.

These amendments became effective June 16, 2021. If you have any questions regarding this change, would like more detail, or to know how it affects your business, please contact Riley Rodgers at [email protected] or KWA at [email protected]. KWA will keep you abreast of any additional changes and appreciate you consideration of using us for your collection, replevin, bankruptcy, foreclosure, and other legal needs in WV, OH, KY, IN and WI.