West Virginia Attorney General Darrell McGraw is doggedly going after debt collection agencies that violate the state’s business licensing requirements. On the heels of his settlements with National Recovery Services and Carpenter Capital Investments, his office announced that it had entered into settlement agreements with debt buyers Trailhead Capital and Troy Capital. The agreements will wipe out over $1.25 million of old debt for West Virginians, and will entitle others to $15,000 in cash refunds.

McGraw lashed out against debt buyers, saying, “Rather than working with consumers to develop plans that might enable them to pay their debt over time, banks increasingly sell defaulted credit card debt for pennies on the dollar to collection agencies called debt buyers. Debt buyers often take overly aggressive collection actions that include the filing of lawsuits – even when they have little proof of the debts they seek to collect from consumers.”

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. Neither Trailhead Capital nor Troy Capital was registered in West Virginia.