AG Zoeller, Department of Financial Institutions Return $1M To Consumers

0

Indiana Consumers Will Also See Over $11M In Debt Canceled

INDIANAPOLIS, IND.– Indiana Attorney General Greg Zoeller and the Indiana Department of Financial Institutions (DFI) have reached a settlement agreement with Western Sky Financial LLC, CashCall, Inc., WS Funding, LLC, Delbert Services Corporation, and John Paul Reddam affecting more than 10,000 Indiana residents. A settlement administrator, at Defendants’ expense, will mail refund checks to the consumers identified in the settlement. Borrowers affected by the unlawful lending will also see their loan balances canceled and any information on the loans removed from their credit reports.

The Attorney General and DFI reached a settlement agreement with the companies to resolve allegations that they made, serviced, and collected high-cost loans in violation of the Indiana Deceptive Consumer Sales Act and the Indiana Uniform Consumer Credit Code. As part of the settlement, the companies are banned from making consumer or small loans in Indiana for two years, and are required to apply and obtain a license from DFI before resuming consumer or small loan lending activities in the state.

“There are few cases that are as outrageous as this one where consumers were taken advantage of during a time of need,” Zoeller said. “Not only will consumers receive some restitution but these kinds of acts will be halted for years to come.”

The lawsuit filed against CashCall alleged that the company engaged in a “rent-a-tribe” scheme. CashCall’s front company, Western Sky Financial, LLC, was falsely associated with a Native American tribe and originated unlawful loans. Immediately, these loans were then transferred to CashCall, which collected and charged excessively high interest rate payments.

Western Sky and CashCall serviced and collected personal loans with annual percentage rates greatly exceeding those authorized by Indiana law and obligating more than 10,000 consumers to re-pay many times over the amount they borrowed in unlawful fees and interest.

As part of the settlement, the defendant companies have been ordered to:

  • Repay $1 million dollars in restitution for illegal loan costs to Indiana consumers impacted by the high-priced loans.
  • Cancel and adjust to a zero balance on loans that they own, service or collect.
  • Notify credit reporting agencies to remove credit information for the loans from the consumers’ credit files.
  • Cease all consumer and small loan lending activity within Indiana for two years.
  • After the two year ban, not participate in direct or indirect servicing, collecting, consumer lending activity, or attempt to service or collect consumer loans without a proper license issued by the DFI.
  • Notify all persons and entities who previously purchased or who were assigned loans from the defendants that the loans have been discharged, forgiven, and that the Court has determined the loans are legally unenforceable.
  • Comply with the Indiana Uniform Consumer Credit Code and the Indiana Deceptive Consumer Sales Act.

Zoeller thanked Deputy Attorneys General Tom Irons, Justin Hazlett and Betsy Isenberg for their work on this case.

RELATED ARTICLESMORE FROM AUTHOR