WEST virginia
legislature
2017 regular session
By
[
to the Committee on the Judiciary.
A BILL to amend and
reenact §46A-5-101 of the Code of West
Virginia, 1931, as amended, relating to modifying the penalties imposed on debt
collectors who violate the provisions of the West Virginia Consumer Credit and
Protection Act; limiting the amount consumers may be awarded; and reducing the
period in which an action may be brought from four years to two years.
Be it enacted by the
Legislature of West Virginia:
That §46A-5-101 of the Code of West Virginia, 1931, as
amended, be amended and reenacted to read as follows:
ARTICLE 5. CIVIL
LIABILITY AND CRIMINAL PENALTIES.
§46A-5-101. Effect of
violations on rights of parties; limitation of actions.
(1) If a creditor or debt
collector has violated the provisions of this chapter applying to collection of
excess charges, security in sales and leases, disclosure with respect to
consumer leases, receipts, statements of account and evidences of payment,
limitations on default charges, assignment of earnings, authorizations to
confess judgment, illegal, fraudulent or unconscionable conduct, any prohibited
debt collection practice, or restrictions on interest in land as security,
assignment of earnings to regulated consumer lender, security agreement on
household goods for benefit of regulated consumer lender, and renegotiation by
regulated consumer lender of a loan discharged in bankruptcy, the consumer has
a cause of action to recover: (a) Actual damages; and (b) a right in an action
to recover from the person violating this chapter a penalty of up to $1,000
per violation: Provided, That the aggregate amount of the penalty
awarded shall not exceed the greater of $175,000 or the total alleged
outstanding indebtedness civil action: Provided, however
That in a class action the aggregate limits on the amount of the penalty set
forth above shall be applied severally to each named plaintiff and each class
member such that no named plaintiff nor any the class member
may not recover in excess of the greater of $175,000 or the total
alleged outstanding indebtedness lesser of $500,000 or one percent of
the net worth of the debt collector. With respect to violations arising from
consumer credit sales, consumer leases, or consumer loans, or from sales as
defined in article six of this chapter, no action pursuant to this subsection
may be brought more than four years two years after the
violations occurred. This limitations period shall apply to all actions filed on
or after September 1, 2015, except that for actions accruing under this
subsection after August 31, 2017, the limitations period is two years after the
violations occurred.
(2) If a creditor has
violated the provisions of this chapter respecting authority to make regulated
consumer loans, the loan is void and the consumer is not obligated to pay
either the principal or the loan finance charge. If he or she has paid
any part of the principal or of the finance charge, he or she has a
right to recover in an action the payment from the person violating this
chapter or from an assignee of that person's rights who undertakes direct
collection of payments or enforcement of rights arising from the debt. With
respect to violations arising from regulated consumer loans made pursuant to
revolving loan accounts, no action pursuant to this subsection may be brought
more than four years after the violation occurred. With respect to violations
arising from other regulated consumer loans, no action pursuant to this subsection
may be brought more than four years after the violation occurred. This
limitations period shall apply to all actions filed on or after September 1,
2015.
(3) A consumer is not
obligated to pay a charge in excess of that allowed by this chapter and if he or
she has paid an excess charge, he or she has a right to a refund. A
refund may be made by reducing the consumer's obligation by the amount of the excess charge. If the
consumer has paid an amount in excess of the lawful obligation under the agreement,
the consumer may recover in an action the excess amount from the person who
made the excess charge or from an assignee of that person's rights who
undertakes direct collection of payments from or enforcement of rights against
the consumer arising from the debt.
(4) If a creditor or debt
collector has contracted for or received a charge in excess of that allowed by
this chapter, the consumer may, in addition to recovering such excess charge,
also recover from the creditor or the person liable in an action a penalty of up
to $1,000 per violation: Provided, That the
aggregate amount of the penalty awarded shall not exceed the greater of
$175,000 or the total alleged outstanding indebtedness civil action:
Provided, however, That in
a class action the aggregate limits on the amount of the penalty set forth
above shall be applied severally to each named plaintiff and each class member
such that no named plaintiff nor any class member may recover in excess of the greater
of $175,000 or the total alleged outstanding indebtedness $500,000 or
one percent of the net worth of the debt collector. With respect to excess
charges arising from consumer credit sales, consumer leases, or consumer loans,
no action pursuant to this subsection may be brought more than four two
years after the time the excess charge was made. This limitations period shall
apply to all actions filed on or after September 1, 2015, except that for actions
accruing under this subsection after August 31, 2017, the limitations period is
two years after the time the excess charge was made.
(5) Except as otherwise
provided, a violation of this chapter does not impair rights on a debt.
(6) If an employer
discharges an employee in violation of the provisions prohibiting discharge,
the employee may within ninety days bring a civil action for recovery of wages
lost as a result of the violation and for an order requiring the reinstatement
of the employee. Damages recoverable shall not exceed lost wages for six weeks.
(7) A creditor or debt
collector has no liability for a penalty under subsection (1) or (4) of this
section if, after discovering an error and prior to the institution of an
action under this section or the receipt of written notice of the error, the
creditor notifies the person concerned of the error and corrects the error: (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. If the violation
consists of a prohibited agreement, giving the consumer a corrected copy of the
writing containing the error is sufficient notification and correction. If the
violation consists of an excess charge, correction shall be made by an
adjustment or refund.
(8) If the creditor or debt
collector establishes by a preponderance of evidence that a violation is
unintentional or the result of a bona fide error of fact notwithstanding the
maintenance of procedures reasonably adapted to avoid any such violation or
error, no liability is imposed under subsections (1), (2) and (4) of this
section and the validity of the transaction is not affected.
NOTE: The purpose of this bill is
to make the West Virginia Consumer Credit and Protection Act more consistent
with the federal Fair Debt Collection Practices Act. The bill modifies the
penalties imposed on debt collectors who violate the provisions of the
WVCCPA. It limits the amount an
individual consumer may be awarded to actual damages plus $1000 per action, and
in class actions for the entire class to the lesser of $500,000 or 1 percent of
the debt collector’s net worth. The bill also reduces the time period that an
action may be brought from four years to two years.
Strike-throughs indicate language
that would be stricken from a heading or the present law and underscoring
indicates new language that would be added.