Which place’s debt rules apply—and who can help?

S_WV PASS-01 — West Virginia provider market access and consumer fees

Actual fresh source-access date: October 25, 2026, Pacific time. Historical coordinator baseline: October 22, 2026; not treated as current verification. Actual mode/model: Regular Chat using GPT-5.6 Sol Pro; no Deep Research. Component boundary: Provider classification, public market access, consumer fees, fee timing, and only those exemptions, bonds, cancellation rules, and judicial decisions necessary to resolve those questions. The remaining West Virginia state dimensions stay open.

Executive determination

West Virginia does not appear to offer a conventional “debt-settlement provider license” or “debt-adjuster license” for the covered conduct reviewed in this pass. Its core statute instead:

1. Defines debt pooling by conduct—a plan under which a debtor would deposit or does deposit funds for distribution among creditors.
2. Makes it unlawful for any person to solicit in any manner a debt pooling.
3. Separately makes it unlawful for a nonlawyer to impose aggregate charges exceeding 2% of the total money actually deposited under the plan.
4. Permits a qualifying nonprofit an additional charge of up to 5% of actual deposits, but only to defray generally furnished personal-money-management counseling. Federal Bureau of Investigation+2

That produces an awkward but important distinction:

• A marketed program that fits “debt pooling” faces an express solicitation prohibition.
• The 2% ceiling is not an affirmative authorization, license, exemption from solicitation, or safe harbor.
• A truly unsolicited transaction at or below the 2% ceiling is textually conceivable because the statute prohibits solicitation and overcharging rather than expressly prohibiting every act of performing debt pooling. But I found no regulator-confirmed operational safe harbor or controlling appellate decision validating that business model. It therefore remains a legal hold, not a verified pathway.
• Ordinary advertising, lead generation, outbound calls, or communications inviting consumers to respond for later phone enrollment create substantial “solicitation” risk. The exact outer boundary of “solicit in any manner” has not been authoritatively resolved in the sources reviewed.

A 2014 Kanawha County circuit-court order applied the statute’s definition and 2%-of-actual-deposits ceiling to a debt-settlement program. It aggregated engagement, maintenance, check-handling, failed-payment, and contingency charges rather than accepting the program’s fee labels. The court also rejected the provider’s attempt to rely on nominal attorney involvement where the nonlawyer company actually performed and controlled the services. West Virginia Judiciary+2

The West Virginia Supreme Court of Appeals’ 2020 memorandum decision does not establish controlling appellate approval of those debt-pooling holdings. Morgan Drexen withdrew its appeal; the Supreme Court expressly limited review to attorney Lawrence Williamson’s separate deceptive-practices liability. It affirmed that liability, not the debt-pooling, fee-cap, CSO-registration, or telemarketing findings against Morgan Drexen. West Virginia Judiciary+1

Separate West Virginia Credit Services Organization and Telemarketing registrations can apply depending on representations and acquisition channel. They are conditional overlays, not debt-pooling permission. A general West Virginia business-registration certificate likewise cannot legalize otherwise unlawful activity; the statute says so expressly. Federal Bureau of Investigation+4

A. Substantive answers

1. Current classification of debt adjustment, settlement, DMP, counseling, and related fee-taking

1.1 Controlling activity definition

S_WV-P1-C001. West Virginia’s operative “debt pooling” definition is activity-based, not label-based. It covers advice or services of any kind in establishing or operating a plan under which a debtor would deposit or does deposit funds for distribution among creditors. The language does not depend on whether the provider calls the service settlement, negotiation, debt adjustment, credit counseling, a DMP, attorney services, financial wellness, or something cuter invented by marketing. Federal Bureau of Investigation

The operative elements are:

1. Advice or services;
2. Establishment or operation of a plan;
3. A contemplated or actual debtor deposit;
4. A purpose of distributing the deposited funds among creditors.

1.2 Model-by-model classification

1.3 Consumer/business distinctions under the overlays

The conditional Credit Services Organizations Act is narrower: its “buyer” is an individual, and its “extension of credit” definition concerns personal, family, household, or agricultural purposes. It applies when, for compensation, the provider offers or represents that it will improve a buyer’s credit record, obtain an extension of credit, or advise the buyer about those objectives. Debt settlement without those representations is not automatically a CSO service. C011. Federal Bureau of Investigation+1

The West Virginia Telemarketing Act covers services offered to natural persons primarily for personal, family, household, or agricultural purposes, along with specified investment and real-property categories. It expressly excludes business-to-business sales. C012. Federal Bureau of Investigation+2

2. Prohibited, registered, licensed, or conditionally exempt models

2.1 Core debt-pooling status

S_WV-P1-C013. Soliciting a covered debt pooling “in any manner” is unlawful. Section 61-10-23 does not identify an issuing agency, application, license, registration, approval order, or public debt-pooling license roster. It is a criminal prohibition and fee restriction, not an ordinary licensing act. Federal Bureau of Investigation

This means:

• A CSO registration is not permission to solicit debt pooling.
• A telemarketer registration is not permission to solicit debt pooling.
• A corporate certificate of authority or general business-registration certificate is not permission.
• Registration may be necessary under an overlay, but it is not sufficient to legalize conduct prohibited by §61-10-23.

West Virginia’s general business-registration law confirms that issuance of a certificate does not legalize an otherwise illegal act, business activity, or transaction or shield anyone from civil or criminal consequences. C014. Federal Bureau of Investigation+1

2.2 Is all performance of debt pooling prohibited?

Not expressly. The core statute prohibits:

1. Soliciting debt pooling; and
2. For a nonlawyer, charging more than the prescribed percentage.

It does not contain a separate sentence saying that every act of rendering debt pooling is unlawful. Therefore:

• Marketed acquisition: prohibited if the communications constitute solicitation of a covered plan.
• Truly unsolicited inbound performance: textually possible at or below the fee ceiling, but no regulator safe harbor, application path, or controlling decision was found.
• Operational conclusion: no verified, ordinary commercial market-access pathway has been established for a provider that intends to advertise or solicit a covered deposit-and-distribution program. C015.

That is a bounded textual conclusion, not advice that an “inbound only” model is safe.

2.3 Attorney condition

The “licensed attorneys” exception appears inside the statute’s charge-cap sentence, not its preceding all-person solicitation prohibition. Thus the text exempts licensed attorneys from the 2% overcharge offense; it does not expressly exempt attorneys from the solicitation sentence. Section 61-10-23 itself does not define which jurisdiction’s license suffices. C016. Federal Bureau of Investigation

The 2014 circuit court found that Morgan Drexen, not the nominal attorneys, actually performed and controlled the debt-settlement services and therefore could not use the attorney exception. The 2020 Supreme Court decision affirmed the attorney’s separate deception liability but did not decide the debt-pooling exception on the merits. West Virginia Judiciary+2

The CSO statute has a distinct, narrower attorney exemption: the person must be licensed to practice law in West Virginia and must be acting within the course and scope of that practice. Mere affiliation, contract paralegal language, or use of attorney letterhead does not itself establish that exemption. C017. Federal Bureau of Investigation+1

2.4 Nonprofit condition

A nonprofit label is not a categorical exemption from the core statute. The core provision merely allows a nonprofit firm, corporation, or voluntary association to impose an additional charge not exceeding 5% of actual deposits, and only to defray counseling furnished to its debtor clientele generally concerning personal money management. The solicitation prohibition remains textually applicable to “any person.” C018. Federal Bureau of Investigation

Separately:

• A genuine organization exempt under Internal Revenue Code §501(c)(3) is exempt from the West Virginia CSO article.
• Under the Telemarketing Act, a qualifying charitable organization is exempt from registration and bonding only; the statute does not say that this particular exemption removes the rest of the article.
• Federal CROA also excludes a genuine §501(c)(3) nonprofit from its “credit repair organization” definition. C019. Federal Bureau of Investigation+2

2.5 Financial institutions and other entities

The core debt-pooling statute contains no express bank, credit-union, lender, supervised-financial-organization, or creditor exemption. The separate CSO article exempts regulated lenders, insured banks and savings associations, credit unions, §501(c)(3) organizations, specified licensed professionals acting within scope, consumer reporting agencies, certain real-property lenders, and qualifying vehicle retailers. The Telemarketing Act separately exempts supervised financial organizations acting within regulated scope, business-to-business transactions, and other enumerated categories. These overlay exemptions do not automatically exempt the same entity from §61-10-23. C020. Federal Bureau of Investigation+2

2.6 Authorization matrix

3. Applicable fee structures and current limits

3.1 Core debt-pooling consumer fee ceiling

S_WV-P1-C021. For a nonlawyer, the aggregate ceiling is:

Maximum aggregate charge=2%×total money actually deposited pursuant to the debt pooling\text{Maximum aggregate charge} = 2% \times \text{total money actually deposited pursuant to the debt pooling}Maximum aggregate charge=2%×total money actually deposited pursuant to the debt poolingThe base is actual deposits, not:

• Original enrolled debt;
• Current balances;
• Monthly scheduled deposits not yet made;
• Projected savings;
• Number of creditors;
• Settled principal;
• A percentage of savings;
• A contractual fee quoted at enrollment. Federal Bureau of Investigation

The 2014 trial court treated engagement fees, monthly maintenance charges, check-processing charges, failed-ACH charges, and a 25%-of-savings contingency fee as part of the charges subject to the aggregate ceiling. It did not permit fee labels to create separate buckets. C022. West Virginia Judiciary+1

3.2 Nonprofit additional charge

A qualifying nonprofit may charge:

5%×actual deposits5% \times \text{actual deposits}5%×actual depositsin addition to the ordinary 2%, but only for the specified general personal-money-management counseling purpose. The arithmetic combined ceiling can therefore be 7% of actual deposits, but “7%” is not a freestanding rate available to every nonprofit or every counseling service. C023. Federal Bureau of Investigation

3.3 Attorney fee-cap exception

Section 61-10-23 does not impose its 2% fee ceiling on a licensed attorney. That does not establish:

• An attorney exemption from the solicitation prohibition;
• An exemption from the TSR;
• An exemption from CROA where applicable;
• An exemption from West Virginia’s CSO statute unless the attorney satisfies that article’s West-Virginia-license and scope conditions;
• Permission for a nonlawyer provider to use an attorney wrapper. C024. Federal Bureau of Investigation+2

3.4 No indexing or adjusted table

The 2% and conditional 5% figures are fixed statutory percentages. I found no CPI formula, annual adjustment mechanism, agency fee table, bulletin, or current-dollar conversion applicable to those percentages. There is therefore no unverified “current adjusted amount” to calculate or hold. C025. Federal Bureau of Investigation+1

3.5 No separate state subcaps

Section 61-10-23 establishes no separate:

• Setup-fee allowance;
• Monthly-fee allowance;
• Per-account or per-debt cap;
• Settlement-fee cap;
• Savings-fee cap;
• ACH/check fee allowance;
• Aggregate dollar minimum;
• Cancellation fee.

Instead, “fee, reimbursement of costs, or otherwise” is aggregated against the percentage ceiling. C026. Federal Bureau of Investigation+2

3.6 CSO fee and bond rules

The CSO article does not establish a general consumer-price ceiling. It regulates timing and security:

• A CSO may not charge or receive money before completing all agreed services unless it has the required bond or surety account.
• The bond or surety account is $15,000.
• Registration must occur before conducting business.
• The Secretary of State may charge a filing fee not exceeding $100; the current operational page lists $50 for Form CSO-1 plus a $1 online-processing fee. These are provider government charges, not statutory consumer-service fees. C027. Federal Bureau of Investigation+3

The current form structure corroborates that an applicant indicates whether it will accept early payments and, if so, supplies the $15,000 security. The July 2025 CSO-1 and September 2026 CSO-4 are operational forms; their embedded historical code excerpts are not substitutes for the current official code. WV Secretary of State+2

3.7 Telemarketer government fees and security

The active 119 C.S.R. 301 rule sets:

• Initial registration fee: $250;
• Renewal fee: $250;
• Online registration/renewal discount: $50;
• No refund or credit for ordinary closure, cessation, revocation, or suspension; refund is limited to erroneous payment under the rule. West Virginia Tax Division+2

The Telemarketing Act requires either:

• A separate $100,000 bond for each telemarketing location, or
• A single $500,000 bond for all locations,

unless an applicable exemption alters that requirement. These are provider registration/security requirements, not consumer fee ceilings. C028. Federal Bureau of Investigation

3.8 Refund and credit rules within this component

4. When fees may be requested or received

4.1 Core West Virginia timing

Section 61-10-23 does not contain a settlement-performance trigger comparable to the federal TSR. Its mathematical base is money actually deposited.

For a nonlawyer:

• Before any actual deposit, 2% of the base is $0.
• As actual deposits accumulate, the aggregate numerical ceiling changes.
• The statute does not say that reaching the numerical ceiling means the fee has been earned, that solicitation becomes lawful, or that another law’s performance conditions disappear.
• A contract for a higher future fee does not transform the higher fee into a permissible charge merely because collection is delayed. C033. Federal Bureau of Investigation+2

4.2 State CSO timing

Where Article 6C applies, a CSO cannot charge or receive payment before all agreed services are completed unless it has the $15,000 bond or surety account. That is a conditional state exception to Article 6C’s own timing rule; it is not an exception to §61-10-23, the TSR, or CROA. C034. Federal Bureau of Investigation+1

The state text says “charge or receive.” The federal TSR separately prohibits requesting or receiving a covered debt-relief fee before its federal triggers. The verbs and scopes should not be collapsed.

4.3 West Virginia telemarketing credit-improvement timing

When a telemarketer represents that services will remove derogatory information from or improve a person’s credit history, record, or rating, it cannot request or receive a fee until:

1. The represented timeframe for all services has expired; and
2. The telemarketer has provided a consumer report demonstrating that the promised results were achieved, issued more than six months after the results were achieved.

Registration cannot be represented as state endorsement. C035. Federal Bureau of Investigation

That is not a universal debt-settlement timing rule. It applies because of the particular credit-improvement representation.

4.4 Federal TSR timing as common context

When the federal Telemarketing Sales Rule applies to the debt-relief service, no fee may be requested or received until:

1. At least one debt has been renegotiated, settled, reduced, or otherwise altered under a valid agreement executed by the customer;
2. The customer has made at least one payment under that agreement; and
3. The fee for an individually altered debt is allocated by either:The same proportional relationship between that debt’s enrolled balance and the total enrolled balance; orA uniform percentage of savings that does not change from one debt to another. C036. eCFR+2

A customer-initiated call is not necessarily exempt. Calls responding to advertising for debt-relief services and calls responding to direct-mail debt-relief solicitations remain within the relevant TSR provisions. C037. eCFR

A dedicated account does not itself authorize provider fees. The federal conditions include an insured institution, consumer ownership of funds and interest, unaffiliated administration, no referral compensation, and the withdrawal/refund conditions described above. C038. eCFR

4.5 Federal CROA timing as conditional overlap

Federal CROA applies only when the paid service has the express or implied purpose of improving a consumer’s credit record, history, or rating and uses interstate commerce or the mails. It is not automatically triggered by every debt-settlement service. When it applies:

• No money may be charged or received before the agreed service is fully performed.
• No service may begin before the written contract and the three-business-day period.
• State law remains applicable except to the extent of an actual inconsistency.
• Genuine §501(c)(3) organizations, a creditor restructuring its own debt, and specified depository institutions and credit unions are excluded from the federal definition. C039. U.S. Code+3

A West Virginia CSO bond does not create a federal CROA advance-fee exception.

4.6 Combined constraint order

For an enrolled consumer transaction, the provider must satisfy all independently applicable rules. A useful order is:

1. Is the activity debt pooling under §61-10-23?
2. Was the covered debt pooling solicited?
3. Is the provider a nonlawyer, qualifying attorney, or qualifying nonprofit?
4. What are cumulative actual deposits and prior aggregate charges?
5. Does the state CSO article apply because of credit-improvement or credit-obtaining services?
6. Does West Virginia telemarketing apply to the acquisition/enrollment channel?
7. Does the federal TSR apply?
8. Does CROA apply because of express or implied credit-improvement purpose?
9. Have the applicable performance and cancellation conditions been satisfied?

A favorable result at one step does not cure failure at another.

5. Current regulator procedure, lookup, and public market-access evidence

5.1 Core debt pooling

No debt-pooling application, license, issuing regulator, approval order, or dedicated public debt-pooling registry was located. This negative finding is bounded to the current official code, Secretary of State, Tax Division, Division of Financial Institutions, and official court materials reviewed. It is not a claim that no obscure unpublished agency material can exist.

The official searches instead returned:

• The criminal debt-pooling statute;
• The conditional CSO registration;
• The conditional telemarketer registration;
• General business registration;
• Debt-collector organization types, which are a different activity.

5.2 CSO registration procedure

The Secretary of State’s current instructions say that businesses offering to arrange, extend, or repair credit must register unless exempt. For an out-of-state corporation, the page identifies:

1. Foreign certificate of authority;
2. CSO-1 registration statement; and
3. West Virginia State Tax Department business-registration certificate. WV Secretary of State+1

The current operational amounts are:

• CSO-1 filing fee: $50;
• Online processing: $1;
• Early payment: $15,000 bond or trust account;
• No early payment before completion: no Article 6C bond/surety account required. WV Secretary of State+1

The public Secretary of State advanced search supports organization types including:

• Credit Service Organization;
• Exempt CSO;
• Secondary organization type: Credit Service Organization;
• Active/inactive status filtering. C040. West Virginia Secretary of State+1

This can verify a public filing record. It does not prove that the filer may lawfully solicit debt pooling, that its bond is presently sufficient for every activity, that an exemption applies to the facts, or that a particular transaction complies with other law.

Procedural inconsistency

The Secretary of State webpage says the customer-signed CSO disclosure should be retained for one year. The current statute says two years. The statute is the controlling legal source for this pass; the webpage’s one-year statement is treated as stale or erroneous operational guidance. C041. Federal Bureau of Investigation+1

5.3 Telemarketer registration procedure

The Telemarketing Act says no person may act as a telemarketer without registration and requires the initial application at least 60 days before offering consumer goods or services through the covered channel, followed by annual renewal. Federal Bureau of Investigation

The Tax Division’s current page links Form TLM. The current linked form is marked Rev. 02-19 and states $250 due; the active legislative rule supplies the $50 online discount. The SOS administrative-law database identifies 119 C.S.R. 301 as an active legislative rule effective April 9, 1999. West Virginia Tax Division+3

I did not locate a current, public, telemarketer-specific roster equivalent to the SOS CSO organization-type search. Therefore:

• The procedure and active rule are verified.
• A named provider’s telemarketer-registration status is not verified merely from its marketing or general business entity record.
• The exact public route for confirming a specific telemarketer’s current registration remains unresolved without contacting the agency, which this assignment prohibits.

5.4 General business registration

A West Virginia business-registration certificate is ordinarily required before engaging in business activity in the state. But the certificate is tax/business registration only, and the statute expressly says it does not legalize otherwise illegal activity. Federal Bureau of Investigation+2

5.5 Named-provider status

No named provider was supplied for lookup, and no provider authorization is claimed. A registry filing would prove only the filing/status reflected there—not authorization under §61-10-23.

6. Worked examples

The examples in Part D are boundary and fee-ceiling calculations, not invented licensed scenarios. Because no ordinary debt-pooling license exists and solicitation remains a separate issue, a numerical result does not establish that the provider may market or perform the transaction.

7. Component-level answer and remaining investigations

For a commercial provider wishing to advertise a consumer debt-settlement program in West Virginia and accumulate funds for later creditor distributions, the current evidence supports:

• Classification: covered or at minimum extremely high-risk debt pooling.
• Marketing/access: solicitation expressly prohibited.
• Ordinary licensing route: not established.
• Nonlawyer consumer-fee ceiling: 2% of cumulative actual deposits, aggregating all charge labels.
• Federal telemarketing timing: separate and usually much later than deposit.
• Attorney/nonprofit labels: no automatic cure.
• CSO/telemarketer filings: conditional overlays only.
• Pure direct-pay negotiation: unresolved and requires a fact-specific later pass.

No statewide acceptance, A066 acceptance, or full West Virginia dossier acceptance is implied.

B. Source table

B1. West Virginia primary and official operational sources

B2. Federal common-context sources

C. Claim table

D. Worked examples and scope coverage

D1. Example 1 — cumulative actual deposits and prior fees

Purpose: Test the same fee base and same method over time.

Assumptions

• Covered nonlawyer debt pooling.
• No nonprofit additional charge.
• No claim that solicitation was lawful.
• Consumer previously deposited $300.
• Provider previously charged exactly $6.
• Consumer now deposits another $200.

Operator and calculation

1. Previous cumulative deposits: $300
2. Previous ceiling: $300 × 2% = $6.00
3. New deposit: $200
4. New cumulative deposits: $300 + $200 = $500
5. New cumulative ceiling: $500 × 2% = $10.00
6. Prior charges against same enrolled plan and method: $6.00
7. Incremental numerical headroom: $10.00 − $6.00 = $4.00

Result: The cumulative state arithmetic permits no more than $10.00 total, leaving $4.00 of additional numerical headroom. It does not establish that $4 is earned, that the program may solicit, or that federal timing has occurred. C021-C022, C033. Federal Bureau of Investigation+1

Units/rounding: Dollars and cents; exact multiplication produces no fractional cent.

D2. Example 2 — enrolled debt is not the fee base

Inputs

• Enrolled debt: $20,000
• Actual deposits to date: $0

Calculation

0.02×$0=$00.02 \times $0 = $00.02×$0=$0Result: Core nonlawyer ceiling is $0, not $400.

After one actual deposit of $125:

0.02×$125=$2.500.02 \times $125 = $2.500.02×$125=$2.50Result: Cumulative numerical ceiling becomes $2.50.

The enrolled $20,000 balance does not enter the state formula. C021, C033. Federal Bureau of Investigation

D3. Example 3 — qualifying nonprofit counseling charge

Assumptions

• Actual deposits: $500
• Entity is genuinely a nonprofit firm, corporation, or voluntary association.
• The additional charge actually defrays personal-money-management counseling furnished for the benefit of the provider’s debtor clientele generally.
• No conclusion is made about solicitation.

Calculation

Ordinary ceiling:

$500×2%=$10$500 \times 2% = $10$500×2%=$10Conditional counseling addition:

$500×5%=$25$500 \times 5% = $25$500×5%=$25Combined numerical maximum:

$10+$25=$35$10 + $25 = $35$10+$25=$35Result: $35 is the combined arithmetic ceiling only if every nonprofit/counseling condition is established. Without the qualifying counseling facts, the additional $25 is unavailable. C018, C023. Federal Bureau of Investigation

D4. Example 4 — partial settlement with consistent TSR proportional allocation

Purpose: Reconcile the same enrolled balances, contracted fee, prior fee, and allocation method across debts.

Contract inputs

Hypothetical total contracted fee: 10% of enrolled balances = $2,000

Chosen federal method: enrolled-balance proportional allocation for every debt.

Federal allocations:

• A: $5,000 ÷ $20,000 × $2,000 = $500
• B: $10,000 ÷ $20,000 × $2,000 = $1,000
• C: $5,000 ÷ $20,000 × $2,000 = $500

First triggered debt: A

Assume:

• A is settled under a valid agreement.
• Consumer makes one payment under that agreement.
• Cumulative actual deposits under the plan are $3,000.
• No fee was previously charged.

West Virginia ceiling:

$3,000×2%=$60$3,000 \times 2% = $60$3,000×2%=$60Federal allocation associated with A:

$500$500$500Combined numerical comparison: The lower amount is $60, but that does not cure West Virginia’s solicitation issue or establish that every other condition has been met.

Later triggered debt: B

Assume:

• B later satisfies the TSR settlement-and-one-payment trigger.
• Cumulative actual deposits have increased to $5,000.
• The provider previously charged the full $60 calculated above.

New West Virginia cumulative ceiling:

$5,000×2%=$100$5,000 \times 2% = $100$5,000×2%=$100Incremental West Virginia headroom:

$100−$60=$40$100 - $60 = $40$100−$60=$40Federal allocation for B under the unchanged method is $1,000.

Result: The maximum additional amount under the state arithmetic is $40, not $1,000. That $40 is not automatically earned or collectible; solicitation, state overlays, federal coverage, contractual terms, and all performance conditions still must be satisfied. C021-C022, C033, C036. Federal Bureau of Investigation+2

Consistency check: The example does not switch to a savings method for B and does not recalculate balances after enrollment.

D5. Example 5 — uniform percentage-of-savings method as a separate scenario

This is a different contract and is not mixed with Example 4.

Inputs

• Debt at enrollment: $5,000
• Amount actually paid to satisfy it: $3,000
• Savings: $5,000 − $3,000 = $2,000
• Uniform contracted savings percentage: 25%
• TSR settlement agreement and one-payment trigger satisfied
• Cumulative West Virginia actual deposits: $3,000

Federal savings-method amount:

$2,000×25%=$500$2,000 \times 25% = $500$2,000×25%=$500West Virginia nonlawyer ceiling:

$3,000×2%=$60$3,000 \times 2% = $60$3,000×2%=$60Result: The federal allocation method would produce $500, while the state aggregate ceiling produces $60. Numerically, the provider could not use the federal calculation to exceed the state ceiling. Operational legality remains held because of the solicitation prohibition and other conditions. C021, C036. Federal Bureau of Investigation+1

D6. Example 6 — prior fees and cancellation overlays

Inputs

• Cumulative actual deposits: $1,500
• Prior aggregate charges: $20
• Nonlawyer ordinary core ceiling

State ceiling:

$1,500×2%=$30$1,500 \times 2% = $30$1,500×2%=$30Incremental numerical headroom:

$30−$20=$10$30 - $20 = $10$30−$20=$10Now assume the transaction also falls within Article 6C and the buyer cancels within the statutory three-day period. Article 6C says any payment under that contract must be returned within ten days after the seller receives cancellation. The fact that the core arithmetic shows $10 of unused headroom does not defeat the cancellation return rule. C029. Federal Bureau of Investigation

If the transaction instead or additionally falls within the West Virginia Telemarketing Act, the minimum service-cancellation period is measured from delivery, with payment or credit restored within 30 days after notice. That is not automatically the same cancellation window as Article 6C. C030. Federal Bureau of Investigation

If the federal TSR dedicated-account provision applies, the consumer may withdraw from the debt-relief service and receive all account funds other than properly earned fees within seven business days. C031. eCFR

D7. Example 7 — classification hold for direct-pay negotiation

Facts

• Provider negotiates settlements.
• Consumer never deposits into a provider, processor, or dedicated account.
• Consumer pays each creditor directly from an ordinary checking account after approving each settlement.
• Provider charges a flat consulting fee.

Analysis

The statutory deposit-and-distribution-plan element is not clearly present. The provider may therefore have a serious argument that the service is not “debt pooling” under §61-10-23. But this pass found no controlling West Virginia authority resolving that model.

Before assigning any fee number, the next analysis must determine:

1. Whether the provider nevertheless established or operated a plan for deposits;
2. Whether the consulting fee and payment process create indirect custody or distribution;
3. Whether credit-improvement representations trigger Article 6C or CROA;
4. Whether the sales channel triggers West Virginia telemarketing or the TSR;
5. Whether advertising itself creates some other prohibited/deceptive practice.

Result: Classification hold—no invented licensed or fee scenario. C006.

D8. Provider government-fee separation

CSO filing

• CSO-1 fee: $50
• Online processing: $1
• Provider filing outlay: $51

This is not a statutory consumer charge and does not increase the 2%-of-deposits ceiling. WV Secretary of State

Telemarketer registration

• Initial or renewal rule fee: $250
• Web discount: $50
• Net government charge if the discount is available and used: $200

This is a provider registration expense. Section 61-10-23 expressly includes “reimbursement of costs, or otherwise” in its consumer charge ceiling, so merely passing a registration expense to the consumer would not create a separate cap-exempt fee bucket. Federal Bureau of Investigation+1

D9. Scope coverage and gap table

E. Researcher self-check

Actually read and relied on

• Current official West Virginia Code §61-10-23.
• The 1971 enrolled act pages containing the debt-pooling language and effective-date statement.
• Current CSO definitions, exemptions, prohibited-conduct, bond, registration, disclosure, and contract/cancellation sections.
• Current Secretary of State CSO instructions, public search filters, and current linked CSO forms.
• Current Telemarketing Act definitions, selected operative exemptions, registration, security, disclosure, cancellation, credit-improvement timing, and nonresident-service provisions.
• Current Tax Division telemarketer instructions and linked TLM form.
• Full relevant fee portions of 119 C.S.R. 301 and the official active/effective rule record.
• General business-registration statutes, including the express no-legalization clause.
• The relevant page images from the 2014 Morgan Drexen circuit-court final order.
• The complete relevant procedural and disposition portions of the 2020 Supreme Court memorandum decision.
• Current eCFR TSR provisions used for debt-relief fee timing, allocation, dedicated accounts, and inbound debt-relief calls.
• Current OLRC CROA provisions used for definition, exclusions, advance payment, contract/cancellation, and state-law relation.

Discovery only or not treated as authority

• Search-result snippets.
• Commercial compliance charts.
• Trade-association summaries.
• Company marketing claims.
• Party advocacy as a substitute for the court’s orders.
• Older foundation-state cells.
• The historical code excerpt embedded inside an operational form.
• The SOS webpage’s one-year retention statement where it conflicts with the current two-year statute.

Not established

• A conventional West Virginia debt-settlement or debt-pooling license.
• An agency-approved inbound-only safe harbor.
• A controlling appellate merits interpretation of §61-10-23’s debt-pooling definition, solicitation boundary, fee cap, attorney condition, or dedicated-account application.
• A current public telemarketer roster.
• Any named provider’s registration, bond, exemption, or authorization.
• The complete West Virginia case-law universe.
• The remaining parent-state dimensions.

Process limitations preserved

• No application was filed.
• No agency, provider, consumer, or other person was contacted.
• No CAPTCHA or account workaround was used.
• No private borrower data was accessed.
• No APIs, paid searches, purchases, browser-control permissions, Work mode, Chrome control, other chats, or publication actions were used.
• No local report or website file was written.
• This was substantive research in the authorized regular Chat, but it was not an independent review and is not labeled publication-ready.
• No statewide or A066 acceptance is implied.

Present component conclusion: West Virginia’s core law is best treated as a solicitation prohibition plus an unusually low actual-deposit fee ceiling—not as an ordinary provider-licensing statute. Separate CSO, telemarketing, and general business registrations may be required, but none supplies affirmative permission to solicit a covered debt-pooling program.

END S_WV PASS-01.