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Barr v. NCB Management Services

West Virginia Court Upholds Consumer Protections

West Virginia's highest court agreed with AARP that a state law prohibiting abusive debt collection covers both creditors and those who collect debts for them.

Background

West Virginia provides civil remedies and criminal penalties for violation of the state's Consumer Credit and Protection Act (WVCCPA). The WVCCPA prohibits communications made with the intent to annoy, abuse, oppress or threaten consumers.

Linda Barr claimed that NCB Management Services, while attempting to collect an alleged debt on behalf of HSBC Bank, violated the WVCCPA. NCB Management moved to dismiss the case claiming it is not covered by the WVCCPA because it is not the creditor.

AARP's "friend of the court" brief, filed by attorneys with AARP Foundation Litigation, pointed out the widespread abusive debt collection practices that led to enactment of fair debt collection laws. The brief, which was joined by the National Association of Consumer Advocates and National Consumer Law Center, argued that laws such as WVCCPA were written to protect individual consumers from the barrage of frightening and abusive tactics, and these laws were written broadly in order to provide expansive protection even as debt collector tactics and approaches evolve.

AARP's brief pointed out that the WVCCPA was not only intended to, but actually does cover all entities seeking to collect debts, whether the actual creditor or not. Reading it otherwise would, in the words of the brief, "conflict with common sense." The brief also pointed out the legislative history of the WVCCPA — which was enacted because consumers were being hounded with harassing calls and contacts — and detailed the abusive tactics used by unscrupulous debt collectors that led to enactment of laws like this in West Virginia and other states.

Reading the language of the statute and similar proceedings in federal court carefully, the court agreed with Barr and AARP and ruled that the state law "allows a consumer to assert a private cause of action against a professional debt collector."

What's at Stake

Unscrupulous debt collectors can and do use harassing tactics to collect debt, including: file lawsuits that individuals either don't know about or don't know how to challenge to collect stale, paid, or nonexistent debts; clog the courts with robo-signed affidavits that make unsupported claims. Most lawsuits end in default judgments based on little or no proof a debt is even owed. Low-income and older people are particularly vulnerable to such abusive tactics.

An explosion of delinquent consumer debt has spawned vibrant debt buying industry to collect on stale debt acquired from creditors for pennies on the dollar. Consumer complaints to state and federal authorities about debt collection practices have exceeded consumer complaints about any other industry for more than 10 years

Case Status

Barr v. NCB Management Services
was certified by the Supreme Court of Appeals in West Virginia (the state's highest court) to determine the reach of the consumer protection law. The case now returns to trial for consideration on the merits.


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