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Internet Payday Loan Lawsuit Filed Just before Christmas

. By
Boston, MAThe parade of Internet payday loan lawsuits advanced last month with the filing of an action by the Consumer Finance Protection Bureau (CFPB) against CashCall Inc., among other defendants. CashCall is based in Anaheim. The allegations include an accusation that CashCall had undertaken to debit consumer checking accounts for loans that had been made illegally. The loans therefore, according to the lawsuit, are void.

That’s because Internet payday loan sites do not acquire the necessary licensing required by more traditional, storefront payday loan vendors. The Internet vendors have also been widely accused of charging exorbitant fees that fly beyond interest rate caps observed by most states. This positions the loans, according to lawmakers, as completely illegal - and various attorneys general in several states are cracking down in an effort to protect consumers.

But it is not an easy task, according to a story published in The Kansas City Star (12/17/13). Loan vendors have been known to find various ways around the regulations and jump through any available loophole with both feet. In the case of Western Sky Financial, which reportedly made the actual loans that have lawmakers in the CashCall lawsuit up in arms, it is claimed the enterprise is owned by an individual with Indian tribe status and, therefore, remains exempt from state laws.

The Kansas City Star reports that Western Sky halted the making of loans last year. CashCall, meanwhile, is reported to have continued to attempt collecting on loans that lawmakers have interpreted as illegal, and thus have initiated internet payday loan lawsuits against CashCall and two of its subsidiaries. For its part, CashCall is of the view that it has every right to collect on those loans and has done nothing wrong, vowing to fight any challenge to its right for collecting on those loans, in court.

The internet payday loan industry has grown thanks to the convenience and widespread availability of the Internet. Traditional payday loan vendors, working out of storefronts, have long been a mainstay for individuals with poor credit, low wages or with an inability to manage their finances. They seek payday loans often as a means to keep going between paychecks.

Rates of interest for payday loans are usually higher than those offered by more traditional sources of financing, such as banks. That said, various states observe caps for interest rates in an effort to protect the consumer, and storefront operators are required to operate within those caps.

Internet payday loan operators, however, do not adhere to those caps as they don’t maintain premises in the states where consumers reside and approach them online for loans. As a result, interest rates can be in the hundreds of percent compounded annually, and sometimes up over a thousand percent. Such financing rates, for those who can least afford such rates, have been described in terms ranging from predatory to inhumane.

Various attorneys general in states such as Arkansas, Arizona, Colorado, North Carolina and New York have launched Internet payday loan lawsuits in an effort to prevent these vendors from making loans and conducting commerce in their respective states in which the vendors are not properly licensed.

The lawsuit is Consumer Financial Protection Bureau v. CashCall, Inc., WS Funding, LLC, Delbert Services Corporation, and J. Paul Reddam, Case No. Case 1:13-cv-13167, Filed December 16, 2013, in US District Court, District of Massachusetts.

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READER COMMENTS

Posted by

on
You do not have to pay back the loans if you are in a state that has currently filed cease and desist orders against Cash Call. You should check with your state banking commission to see if a lawsuit is open.

You can also close your account or ask your bank to give you a new account number.

Stop making the payments - especially if you have paid back the principal and enough interest to cover your state's maximum guidelines.

Posted by

on
I have a loan that started at 2600.00 I have paid 295.00 for over a year and I still owe them over 5000.00. I live in Alabama what can be done to show this loan as paid in full?

Posted by

on
I got a loan with cashcall and I am not able to make my monthly payment right now for the simple fact that I am not making enough money and since I am not able to make my payment right now they send me email everyday saying that they will start garnishing my wages soon. Can they do that without a court order?

Posted by

on
I got a loan with Cash Call and since I have not been able to pay them off. They keep on trying to withdraw funds and each time I get a fee of $29 from my bank...its not fair. I have asked them to work with me cause the monthly bill is $350 and at this time I just cant make those payments they are not willing to work with me at all. Please help!!!

Posted by

on
EVEREST PAYDAY LOANS
IS WHAT IS MAKEING MY LIFE A LIVING
HELL THEY HIRED PEOPLE TO TREATEN ME
AT WORK AS A RESULT OF THAT I GOT FIRED
AND THEY ALSO OVER DREW MY BANK ACCOUNT
THE BANK CLOSED MY ACCOUNT BUT I PAID THEM
THERE WAS ALL KINDS OFF WITHDRAWLS MADE ON MY
ACCOUNT . THE LOAN WAS FOR 500.00 @ 391.071% RATE
PLEASE HELP I HAVE LOST MY JOB AND I DONT
THINK THERE LEGIT THERE OFFICE IS BASED IN COSTA RICA ACCORDING TO THE CONTRACT ..

Posted by

on
If it is illegal for payday loans in your state you can get these negatives off of your report.File complaints against them with the attorney general in your state and ask them to remove them because it is illegal to collect that money.File against the lender or lenders asap.

Posted by

on
I was approached by cashcall,or western sky for a loan also.I needed the money to hold me over until my workers comp case settled.The total time was about 2 months.That 2 month loan cost me $1600.00 dollars.These people are scam the artists!When I called them to pay my loan off,they told me that because I was paying the loan off they had to "ADJUST"my interest rate,which was about 50% higher! Consumers Beware!!

Posted by

on
I paid a lot and they still told me I owed and it's affected my credit reports negatively

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