Blog Viewer

WV Supreme Court Finds that Threat of Criminal Action Against a Consumer Constitutes Debt Collection Under the WVCCPA

By Christopher J. Sears, Esq. posted 05-17-2018 17:22

​In a recent decision, the West Virginia Supreme Court has affirmed a trial court's grant of summary judgment in favor of a consumer who was threatened with criminal action for failing to pay a debt. See Cash N Go, Inc. v. Spruce, 2018 W.Va. LEXIS 351 (W.Va., May 11, 2018).

Under the facts of this case, Shana Spruce (a West Virginia resident) cashed a personal check in the amount of $605.00 at Cash N Go in Hagerstown, Maryland. After the check was returned for insufficient funds, Cash N Go sent a letter to Spruce advising her of the returned check and demanding payment which included a $35.00 returned check fee. Two months later, Spruce filed a Chapter 7 petition for bankruptcy, of which Cash N Go received notice from the U.S. Bankruptcy Court. Thereafter, Cash N Go attempted to contact Spruce directly on two separate occasions, and then sent a third letter advising her that it would stay collection attempts given the bankruptcy but that it intended to pursue a criminal complaint against her under the Maryland Criminal Code. Cash N Go then assigned the debt to One Way Recovery Solutions, LLC for further collection action. Spruce subsequently contacted One Way to discuss the obligation and to set up a payment plan. Afterwards, One Way contacted Spruce directly on five different occasions to collect the debt owed to Cash N Go. At no time did either Cash N Go or One Way contact Spruce's bankruptcy attorney.

Spruce filed a civil action against both Cash N Go and One Way for violations of the unlawful debt collection provisions of the West Virginia Consumer Credit and Protection Act. Early in the litigation, Spruce filed a motion for partial summary judgment on her claimed violations of W.Va. Code, 46A-2-128(e), which prohibits direct contact by debt collectors with individuals who are represented by counsel. In granting the motion, the trial court found that the events were covered by the WVCCPA and that the debt at issue was a "claim" as defined under the Act. Further, the court found that Cash N Go's four communications with Spruce each constituted a separate violations of the Act, and that Cash N Go threatened criminal prosecution for Spruce's failure to pay the debt even though Cash N Go was aware of the pending bankruptcy proceeding. Consequently, the trial court awarded statutory damages in the amount of $4,805.60 for each violation for a total of $19,222.40, plus attorney's fees and costs.

After the completion of further discovery, Spruce filed a second motion for summary judgment on Cash N Go's liability for the five phone calls made by One Way. In granting the motion, the trial court concluded that Cash N Go instructed One Way to contact Spruce despite its "actual knowledge" that she was represented by an attorney. The Court also found that Cash N Go's threat of criminal prosecution caused One Way to misrepresent the debt to Spruce. As such, the trial court awarded statutory penalties for six additional violations of the WVCCPA in the amount of $18,000.00, plus attorney's fees and costs.

On appeal, Cash N Go made several arguments. First, it argued that, because the underlying transaction occurred in Maryland, Maryland state law should control the action. However, because Cash N Go cited no authority in support of its argument, the Supreme Court rejected the argument as having been waived.

Second, Cash N Go argued that the underlying debt was not a "claim" as defined under the WVCCPA. In this regard, Cash N Go asserted that the communications were made in connection with a criminal matter arising in Maryland, rather than the collection of a "claim" under the WVCCPA. In rejecting this position, the Supreme Court found that the argument was disingenuous stating that it was clear that Cash N Go was seeking repayment of the underlying debt. Indeed, the Supreme Court cited Cash N Go's response to discovery wherein it admitted that at all times One Way was acting as its agent and within the scope of its mutual agreement, and One Way's discovery responses wherein it admitted that the phone calls were made for the purpose of collecting a debt.

Finally, Cash N Go challenged the trial court's imposition of the maximum statutory penalty and award of attorney's fees as an abuse of discretion. In upholding the trial court's award of damages, the Supreme Court noted that the trial court found that Cash N Go's actions were "deliberate and intentional" and, thus, there was no abuse of discretion.


There are several hard and fast rules in this decision pertaining to any attempt to collect a debt from a West Virginia resident:

  • Even if the underlying obligation was incurred in another state, the WVCCPA will apply to protect West Virginia residents who are subject to debt collection efforts through the mail or by telephone in the State;
  • If a creditor or debt collector receives notice of a debtor's bankruptcy, all debt collection efforts should cease immediately and any communication thereafter should be directed to the bankruptcy attorney, not the debtor;
  • Courts in West Virginia will scrutinize any threat of criminal prosecution for failure to pay a debt to determine whether the threat is merely a pretext to further debt collection efforts; and
  • It is well within the discretion of a West Virginia judge to award the maximum statutory penalty and attorney's fees where "deliberate and intentional" violations are found.