O.C. lender CashCall scammed borrowers, N.Y. attorney general says
NEW YORK -- New York’s top law enforcement official has accused an Orange County-based lender of scamming borrowers out of “millions of dollars” with high-interest loans.
CashCall, which is based in Anaheim, is one of two companies targeted by New York Atty. Gen. Eric Schneiderman for allegedly hitting cash-strapped New Yorkers with interest rates of 89% to 355% on personal loans.
Schneiderman’s office announced the civil action Monday against CashCall, South Dakota-based Western Sky, an affiliated company and their owners.
“Western Sky and CashCall charged exorbitant interest rates on their loans to scam New Yorkers out of millions of dollars,” Schneiderman said in a statement.
The companies targeted consumers urgently needing money with Internet and TV ads that promised “fast cash,” Schneiderman said.
According to Schneiderman’s office, the companies in question have made 17,970 loans worth more than $38 million to New York consumers since 2010. The interest and fees on these loans racks up to $185 million, according to the complaint filed in the case.
Consumers receiving loans of $1,000 were charged interest rates of more than 234%, meaning they had to repay the loan with $4,942 in principal and interest payments over a two-year period, Schneiderman said.
An attorney for the companies said she would release a statement responding to Schneiderman’s lawsuit Monday afternoon.
CashCall purchased the loans from Western Sky and collected those outstanding debts, according to Schneiderman’s office. His complaint says CashCall and a subsidiary also arrange for the Western Sky loans and provide capital.
Under New York law, most lenders not licensed by the state cannot charge more than 16% interest. Lenders licensed by New York are allowed to charge up to 25% interest.
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