America’s fascination with zombies infiltrated the West Virginia Legislature during the 2014 Regular Session, resulting in the introduction of a “zombie debt” bill, House Bill 4360. The bill, as introduced, was designed to thwart all debt collection efforts after a debt’s statute of limitations has passed. After undergoing various legislative revisions, Committee Substitute House Bill 4360 was enrolled on March 8, 2014, and took effect 90 days thereafter, on June 6, 2014. Although the enrolled version of House Bill 4360 conspicuously omits all references to zombies, and its effect is not so monstrous as its predecessor, it significantly amends section 2-128 of the West Virginia Consumer Credit and Protection Act (“WVCCPA”).
Section 2-128 of the WVCCPA prohibits the use of “unfair or unconscionable means to collect or attempt to collect any claim.” A “claim” is “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or service which is the subject of the transaction is primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.” Id. §1-122(b).
Prior to the Legislature’s recent amendment, section 2-128 enumerated five types of action deemed prohibited as “unfair or unconscionable means to collect or attempt to collect any claim.” Those five types of action, as summarized, include the following:
- Seeking or obtaining a written statement that a consumer’s obligation was incurred for necessaries of life when that is not true. Id. § 2-128(a).
- Seeking or obtaining a written affirmation of any obligation by a consumer who has been declared bankrupt without disclosing that nature and consequences of such affirmation, and that such affirmation is not legally required. Id. § 2-128(b).
- Collecting or attempting to collect from a consumer any part of the debt collector’s fee or charging for services rendered (provided that a specific exception exists for institutions of higher education). Id. § 2-128(c).
- Collecting or attempting to collect interest or charges not expressly authorized by the agreement and by statute. Id. § 2-128(d).
- Communicating with a consumer when it appears the consumer is represented by an attorney and the attorney’s name and address are known or easily ascertainable (provided the attorney is not refusing to communicate or discuss the obligation). Id. § 2-128(e).
With the passage of House Bill 4360, the Legislature has enumerated a sixth type of action prohibited under section 2-128 of the WVCCPA. As amended, section 2-128(f) makes the failure to disclose in an initial written communication certain information regarding a debt beyond the statute of limitations for filing a collection action an unfair or unconscionable means to collect the debt and therefore, violative of the statute, H.B. 4360 (amending W. Va. Code § 46A-2-128). Specifically, if a debt has not passed the date for obsolescence under Section 605 (a) of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681c, et seq. (“FCRA”), then the following disclosure is required: “‘The law limits how long you can be sued on a debt. Because of the age of your debt, (INSERT [DEBT] OWNER NAME) cannot sue you for it. If you do not pay the debt, (INSERT [DEBT] OWNER NAME) may report or continue to report it to the credit reporting agencies as unpaid’ . . . .” Id. (proposing W. Va. Code § 46A-2-128(f)(1)). Section 605(a) of the FCRA provides the “requirements relating to information contained in consumer reports[,]” including how to determine the “date for obsolescence,” which is the date on which information can no longer appear on a consumer report.
Violations of section 2-128(f) will carry a statutory penalty just like other debt collection violations under the WVCCPA. With penalties ranging between $100 and the present statutory maximum of $4,669.82, it would be prudent to consult an attorney for assistance in navigating this new amendment to the WVCCPA.
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