The Consumer Services Division of the Washington State Department of Financial Institutions announced Wednesday (Oct.21) that it has entered into a settlement agreement with Western Sky Financial, CashCall, Inc. and their owners and affiliates concerning allegations that the companies made predatory, high interest loans to Washington borrowers over the Internet.
Under the settlement terms, the companies have agreed to provide refunds to thousands of Washington borrowers and will zero out the principal balances for additional Washington borrowers. The companies also will pay for the costs associated with administering the refunds.
“Western Sky Financial and its related entities came into Washington through the Internet and TV advertisements with a total disregard for Washington laws that protect our consumers from predatory loans. The egregious interest rates involved in this case clearly took advantage of borrowers in need of a loan,” said DFI Director Scott Jarvis in a news release.
The statements of charges issued against CashCall and Western Sky alleged that the companies engaged in unfair and deceptive acts and violated usury laws and other consumer protection laws. The annual interest rates on some loans ranged from 89 percent up to 169 percent, the state alleged.
More than 6,900 loans were made to Washington borrowers totaling more than $17,600,000 in principal, according to DFI.
Borrowers eligible for refunds will be contacted by DFI or by the administrator of the refunds, A.B. Data, Ltd. Washington borrowers who have loans with principal balances on their Western Sky loans will automatically have their loans balances written off. Such borrowers also will have any negative reporting made to the credit bureaus removed from the borrower’s credit history for these loans. DFI said.
To verify whether a company offering consumer or residential loans is licensed by DFI, visit www.dfi.wa.gov and click on the “Verify License” link.
C.R. Roberts: 253-597-8535