A District Court judge in West Virginia has certified a class action against a credit union that was accused of violating state law by charging a “pay-to-pay” fee of $5 for making a payment over the telephone. The ruling allows hundreds of consumers in West Virginia to move forward collectively in their claims that the credit union’s practice violated provisions of the West Virginia Consumer Credit and Protection Act.
The background: The borrower alleged that the credit union charged a $5 fee every time he made a loan payment over the phone, even though neither his loan agreement nor any state statute authorized the charge. The plaintiff claimed that processing such a payment cost the credit union only about $0.30, suggesting that the institution profited from the practice.
- The lawsuit alleged multiple violations of the WVCCPA, including misrepresenting the amount owed and collecting unauthorized charges.
- The plaintiff sought to represent a class of West Virginia residents who paid similar “pay-to-pay” fees to the credit union on any type of loan or line of credit during the statutory period. Records showed at least 1,497 such fees collected across 422 consumer loans.
The ruling: Judge Thomas S. Kleeh of the District Court for the Northern District of West Virginia granted the motion for class certification, finding that the case met all the requirements. Judge Kleeh concluded that the proposed class was sufficiently numerous and that the key legal questions, such as whether state law authorizes the collection of such fees, were common to all members.
- “The crux of the litigation is the legality of the defendant’s debt collection activity — the charging and collecting of the pay-to-pay fees,” Judge Kleeh wrote.
- Common questions of law and fact predominated over individual ones, and certifying the class would “serve the interest of judicial economy” by resolving the issue for all affected consumers in a single proceeding
