A District Court judge in West Virginia has denied a motion to dismiss filed by a credit union that is facing a class-action lawsuit for violating the West Virginia Consumer Credit and Protection Act by charging a $5 fee to make payments over the telephone, ruling the credit union is a debt collector under the statute.
The Background: The plaintiff refinanced his car loan with the defendant in 2022. The credit union, which acts both as a lender and a loan servicer, has been charged $5 as a “pay-to-pay” fee for making his payment over the telephone. He claims that neither the underlying agreement nor any statute authorizes the defendant to charge the fee. Moreover, the plaintiff claims that the $5 fee he is being charged only costs the defendant $0.30 per transaction, thus the defendant is profiting from the fees it is charging.
The Ruling: Under the WVCCPA, a debt collector includes “any person or organization engaging directly or indirectly in debt collection.” Debt collection, meanwhile, is “any action, conduct or practice of soliciting claims for collection or in the collection of claims owed or due or alleged to be owed or due by a consumer.”
- The defendant attempted to argue it wasn’t a debt collector, it did not engage in debt collection, and the fee doesn’t qualify as a claim under the WVCCPA.
- Noting that the definitions of debt collector and debt collection should be “interpreted broadly” and that the defendant’s interpretations were “exceedingly narrow,” Judge Thomas S. Kleeh of the District Court for the Northern District of West Virginia ruled that at this stage of the proceedings, it’s too early to deny the defendant’s motion to dismiss.
