Arizona Attorney General Mark Brnovich announced Wednesday a proposed consent judgment that will require CashCall, Inc., its owner J. Paul Reddam, and a wholly-owned subsidiary, WS Funding LLC, to pay $4.8 million in restitution to Arizona consumers who took out personal loans with interest rates as high as 169 percent, greatly exceeding that allowed under Arizona law, according to a press release by Brnovich’s office.
“Our office will not tolerate unscrupulous lenders preying on vulnerable Arizona consumers,” Brnovich said in a statement. “It is always consumer protection week here, and this case is emblematic of our commitment to hold all companies accountable for any deceptive actions or predatory lending practices.”
In a lawsuit filed in March 2019, the Attorney General’s Office (AGO) alleged that CashCall, its subsidiary, and its owner violated the Arizona Consumer Fraud Act by engaging in a scheme, using a South Dakota company with a purported Native American tribal affiliation as a façade for marketing and issuing unlawful, high-interest loans to Arizona consumers, according to the press release. The AGO amended the complaint in May 2020 to allege a second deceptive, high-interest loan scheme it discovered CashCall had implemented shortly after winding down the first scheme in 2016 in the face of regulatory scrutiny.
In addition to providing restitution for consumers who were harmed, the AGO noted, the proposed judgment requires defendants to cease all collections and to forgive all outstanding loans, the press release notes. The defendants also are prohibited from engaging in any further lending activities that are not in compliance with Arizona law.
A consumer restitution fund is being established for payment of refunds to eligible consumers. Once the proposed judgment – pending court approval – is approved, borrowers who are eligible to receive a refund will receive a check in the mail.
If you believe you have been the victim of consumer fraud, you can file a consumer complaint by visiting the attorney general’s website.
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