CHARLESTON, W.Va. — Within the next three months, West Virginians who were victims of alleged “abusive debt collections” should receive payout from a settlement announced the day before Thanksgiving.
“This has been a long time coming,” said Patrick Morrisey, West Virginia Attorney General. “But, we’re pleased consumers can finally get the benefit of the judgment they earned.”
CashCall Inc. has been ordered to pay a $13 million settlement.
“This will go to the consumers that were impacted. And there were hundreds of consumers that were impacted in West Virginia. We’re in the process right now of developing how those moneys are going to go out the door and the exact amounts,” Morrisey explained.
Morrisey said the non-bank private lender skirted consumer protection laws.
“We believe they were charging interest rates that were in excess of those permitted under the law and that their collection practices were also improper.”
After years of investigation, the state’s former attorney general won a circuit court judgment in 2012 against the company. The case dragged out in appeals over the next three years.
“We’ve had to carry this through the West Virginia Supreme Court and the U.S. Supreme Court and then try to go after the assets out in California in order to make sure we could get the money,” explained the attorney general.
The settlement, finalized in Kanawha Circuit Court, requires CashCall to make an immediate, $10 million lump sum payment. The additional $3 million will be paid in $375,000 installments over the course of two years.
The company is subject to penalties for any installment delinquent by 15 days.
Attorney General Morrisey alleged CashCall partnered with another bank to make it appear as though the bank was the lender, when, in fact, CashCall marketed and sold loans, as well as provided funding and collected on those loans, thus “renting” the partnering bank’s name and charter to avoid certain state regulations.