Commercial Debt Collection Statutes for West Virginia

Commercial-Debt Collection Statutes for:

WEST VIRGINIA

The following words and terms shall be construed as follows:

(a) “Claim” means any obligation for the payment of money due or asserted to be due to another person, firm, corporation, or association.

(b) “Collection agency” means and includes all persons, firms, corporations, and associations: (1) Directly or indirectly engaged in the business of soliciting from or collecting for others any account, bill, or indebtedness originally due or asserted to be owed or due another and all persons, firms, corporations, and associations directly or indirectly engaged in asserting, enforcing, or prosecuting those claims; (2) which, in attempting to collect or in collecting his or her or its own accounts or claims uses a fictitious name or names other than his or her or its own name; (3) which attempts to or does give away or sell to others any system or series of letters or forms for use in the collection of accounts or claims which assert or indicate directly or indirectly that the claims or accounts are being asserted or collected by any person, firm, corporation or association other than the creditor or owner of the claim or account; or (4) directly or indirectly engaged in the business of soliciting, or who holds himself or herself out as engaged in the business of soliciting, debts of any kind owed or due, or asserted to be owed or due, to any solicited person, firm, corporation, or association for fee, commission, or other compensation.

W. Va. Code Ann. § 47-16-2(b) (West, WESTLAW through End of 2005 Third Ex. Sess.).

The term “collection agency” shall not mean or include:

• (1) Regular employees of a single creditor or of a collection agency licensed hereunder; (2) banks;
• (3) trust companies;
• (4) savings and loan associations; (5) building and loan associations; (6) industrial loan companies;
• (7) small loan companies;
• (8) abstract companies doing an escrow business;
• (9) duly licensed real estate brokers or agents when the claims or accounts being handled by such broker or agent are related to or in connection with such brokers’ or agents’ regular real estate business;
• (10) express and telegraph companies subject to public regulation and supervision;
• (11) attorneys-at-law handling claims and collections in their own names and not operating a collection agency under the management of a layman;
• (12) any person, firm, corporation or association acting under the order of any court of competent jurisdiction; or
• (13) any person collecting a debt owed to another person only where:
• (A) Both persons are related by wholly-owned, common ownership or affiliated by wholly-owned corporate control;
• (B) the person collecting the debt acts only on behalf of persons related as described in paragraph (A) of this subdivision; and
• (C) debt collection is not the principal business of the person collecting the debt.

W. Va. Code Ann. § 47-16-2(b) (West, WESTLAW through End of 2005 Third Ex. Sess.).

What is the Fair Debt Collection Practices Act?

The U.S. Congress enacted the FDCPA in 1977 and added it to the Consumer Credit Protection Act in 1978. Its purpose is to eliminate abusive practices of third-party debt collectors. To that end, the Act establishes guidelines for the conduct of debt collectors, defines the rights of consumers, and prescribes penalties for violations.

The FDCPA defines “debt collectors” as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debt … asserted to be owed or due another.”

In other words, “debt collectors” are defined as third parties collecting for a creditor. (As of a 1986 amendment, the FDCPA definition of “debt collector” also includes attorneys who collect debts on a regular basis.)

“Consumers” and “debt” covered under the FDCPA are defined as specifically referring to personal, family, or household transactions. Therefore, debts owed by businesses or by individuals for business purposes (commercial debts) are not subject to the FDCPA.

So, if the FDCPA does not apply to commercial debt collection by third parties, how are commercial collectors regulated?

There are no U.S. federal laws, similar to the FDCPA, that regulate third-party commercial (business-to-business) debt collection or provide guidelines for the conduct of commercial debt collectors.

Who is protecting the rights of commercial creditors and debtors?

Commercial Collection Agency Association

The premier body governing the activities of commercial debt collectors is the Commercial Collection Agency Association (CCAA), an arm of the Commercial Law League of America (CLLA). These organizations are not government bodies, nor do they have any jurisdiction over non-members. However, both require high standards of practice and ethics in order for a commercial collection agency to become a certified member.

The Commercial Collection Agency Association was established in 1972 to “improve the quality and reputation of the commercial collection industry.” It currently has more than 200 members. Approximately 100 core members represent the most prestigious commercial collection agencies in the United States.

The CCAA is an arm of the Commercial Law League of America (CLLA), the oldest creditor’s rights organization in the country established in 1895.

Membership in the CCAA

Members of the CCAA are the only collection agencies in the United States certified by the Commercial Law League of America. In order to obtain certification, the agency must meet rigorous criteria.

• The agency must have been in business at least four years prior to application for membership.
• 80% of the agency’s business must be commercial (business-to-business).
• The agency must maintain a separate Trust Account into which all monies belonging to creditors are placed. This Trust Account is reviewed twice annually by the Executive Director of the CCAA.
• The agency must agree to abide by the CCAA Code of Ethics, which sets ethical standards for dealing with creditors, debtors and attorneys.
• Executives of the agency must meet continuing educational requirements and attend regular CCAA meetings. The member agency must complete sixty continuing educational credits annually.
• The agency must post a surety bond of at least $300,000 for the protection of the creditors it serves.
• One person in the agency must also be a member of the Commercial Law League of America.
• The agency must agree to random periodic site visits from the CCAA Executive Director.
• The agency must be in compliance with all local and state licensing requirements and regulations governing commercial collection firms.

Primarily, the Commercial Law League of America and its Commercial Collection Agency Association have assumed responsibility for looking after the needs and rights of creditors and their customers/debtors. State governments that require licensing and bonding of commercial debt collectors also play an important role.

However, since membership in the CCAA is not compulsory, and some firms may provide collection services in a state but never get licensed, it is up to creditors to ensure they (and their debtors) are receiving the most ethical and highest level of commercial collection service.

Burt And Associates is a member of both CCAA and CLLA. Also, we are licensed in bonded in all 50 states (where required).