The West Virginia Legislature is in session and again is considering a bill to reduce penalties available under the West Virginia Consumer Credit and Protection Act ("WVCCPA" or "Act"). The Act is the primary statute under which consumers file lawsuits on credit transactions, like mortgage loans, credit card debts, and collection calls and letters.
 
The Act allows a consumer who prevails in a lawsuit to recover the actual damages he or she suffered. He or she also is permitted to recover a penalty of $1,000 for each violation of the Act that occurred.
 
Anyone who has been sued in West Virginia under the Act knows this penalty is one of the significant ways the Act differs from the federal Fair Debt Collection Practices Act ("FDCPA"). The federal FDCPA permits a consumer to recover one penalty of $1,000 per lawsuit. The state Act allows a consumer to recover a $1,000 penalty for each violation. Thus, a consumer can recover multiple penalties in one lawsuit. However, the Act attempts to place an outer limit on the amount of penalties. It provides the aggregate amount of the penalties awarded shall not exceed the greater of $175,000 or the total alleged outstanding indebtedness. It further provides, in a class action, each class member’s recovery may not exceed the greater of $175,000 or the total alleged outstanding indebtedness.
 
This new bill amends these provisions in two significant ways. As mentioned, if enacted, a consumer only would be permitted to recover a penalty of $1,000 per lawsuit (instead of multiple penalties in the same lawsuit). Second, in the case of class actions, the aggregate limit on the amount of the damages that may be recovered may not exceed the lesser of $500,000 or 1 percent of the net worth of the defendant.
 
On its face, this bill seems to be a win for creditors and collectors in West Virginia if enacted. However, there also are some concerns. We will continue to monitor this situation and the progress of this bill.