West Virginia Attorney General Darrell McGraw recently announced that his office had reached a settlement with National Recovery Services and Carpenter Capital Investments for allegedly violating the state’s business licensing laws. The federal Fair Debt Collection Practices Act protects consumers across the country, but many states have licensing statutes related to debt collection. West Virginia’s law says that anyone who directly or indirectly collects a debt in that state must register and post a bond. Carpenter Capital Investments is a debt buyer that purchased bad debt, and then turned it over to National Recovery Services. Neither company was registered in West Virginia.

The settlement includes provisions that Carpenter Capital Investments would “cancel the outstanding balances of West Virginia consumers whose debts it had previously assigned for collection.”