CHARLESTON - Almost 500 West Virginians will have their debts cancelled as a result of a handful of settlements between Attorney General Darrell McGraw and debt-purchasing companies.
The companies will wipe away nearly $1 million of debt owed by 492 customers. McGraw initiated his investigation after receiving complaints that the companies were collecting debts without a license and engaging in abusive collection practices.
"My office continues to be concerned about the increasingly widespread practice in which alleged defaulted accounts, mostly credit card debts, are sold to debt purchasers for pennies on the dollar, years after the default and when proof of the debt may no longer exist," said McGraw, a Democrat who is running for re-election against Charleston attorney Dan Greear.
"My office will also continue to monitor this industry to ensure that such debt purchasers are licensed and do not abuse consumers. Notwithstanding our concerns about this industry, I commend these companies for agreeing to conform their practices to West Virginia law and for granting important relief to West Virginia consumers."
A Westover woman complained that one of the companies -- Bureau of Asset Management -- harassed her at work. McGraw's investigation showed that BAM was unlicensed, and it agreed to cancel almost $100,000 in credit card debt allegedly owed by 45 West Virginians.
Ascension Services cleaned up the mess of a company that sold Kirby vacuum cleaners on high-interest credit cards by refunding $28,000 worth of payments and approximately $240,000 in allegedly owed debt for 173 West Virginians.
Fidelity Federal Bank had teamed with Kirby in the 1990s. It is no longer in business.
The other companies that entered into the settlement are Federal Pacific Credit Company, Kessler and Freedman and Phillips & Burns.