Online loans from Western Sky Financial and Cash Call

I am sorry to hear of your friend’s predicament with Western Sky Financial and CashCall. Going further into debt with what most of us would consider usurious loans, like those offered over the internet, offer a temporary measure to fill a cash gap, but are more akin to digging a deeper financial hole. But I get the reasons people will treat the loans as a life line.

I have followed some of the different developments with payday lending, offshore online lending, and so called tribal lenders. I have not kept up with recent events in this area of the debt markets. Your question gave me an opportunity to read up on a good 6 months of developments in the courts and elsewhere.

Western Sky Financial Operates in South Dakota

Western Sky Financial appears to be operating from the Cheyenne River reservation in South Dakota. The same people operating Western Sky appear to have ties to several other online loan operations: Payday Financial Big Sky Cash Lakota Cash Great Sky Finance Four Seasons Cash Red Stone Financial.

Why is their location of any importance? The amount and rate of interest Western Sky Financial, and other payday and internet loans charge, are illegal in many states. The argument Western Sky Financial is making in courts around the country (in order to defend court actions brought by state, federal, and individuals), is that they are tribal lenders. Having caught up on some reading as a result of your question, that argument does not appear to be going to well.

Taking out online loans from Western Sky, or any of their other entities, does result in getting money. Anyone taking out this kind of usurious loan is likely doing so because:

• Your credit score is too low to qualify for traditional loans.
• You are maxed out on credit cards.
• Your debt load is too high to get additional credit – even with a good credit score.
• Like your friend Dave, these loans are only considered when there are immediate hardships and expenses to cover.

My point is, you need the money at the time, found a way to get the money to fill the immediate cash void, and use the loan to get by. As screwy as this is to point out when talking about an online loan that will likely be found to be illegal in many instances, Dave got the money and used it to get by. He may regret the decision later, and learn that there were problems with the loan being made to him as a Florida resident, but what to do about the fact that he got something from Western Sky Financial?

How to Deal with Illegal Online Loans

Some options for Dave to consider when compared to how others have talked about handling repaying, or not repaying, Western Sky Financial would include:

• Closing your checking account payments are being auto drafted from.
• Making payments to Western Sky Financial, but only in the amount you can afford, and up to the principal of the loan.
• Contacting the Florida financial regulation office where you should learn that Western Sky Financial is not licensed in Florida, and file a complaint they can investigate: https://www.flofr.com/PressReleaseDetail.aspx?id=4228

There is an active lawsuit filed against Western Sky Financial by the state of Florida.

If your friend stops making payments to Western Sky Financial and closes the bank account any payments may have been being drawn from, he will need to be prepared for some blow back from either Western Sky Financial, or CashCall, or both. Collection calls and letters are to be expected. It is clear from what you shared that he cannot make the payments, and to do so even if he could, would be paying usurious interest to what is likely an illegal lender in Florida.

If it were me in Dave’s shoes, and I had the money in my budget to pay back something toward the loan every month, I would take a businesslike approach and contact Cash Call and Western Sky to let them know I will only be paying xxx.xx amount each month until the principal is paid. If I did not have the money in my budget due to further setbacks, I would wait and see if things turned around financially and then make an effort to pay the principal, or settle with CashCall or Western Sky or less. If finances remain tough, it may be time for Dave to speak with a bankruptcy attorney. If Dave is at a place where vehicles are being impounded, and power cut off, it may be time to consider his options with bankruptcy now, rather than later.

Anyone with questions about Western Sky Financial, Cash Call, or similar type of online loans and payments, is welcome to post in the comments below for feedback.

1/10/14 Updates to this reader question can be found throughout the comments below. A comment posted by Carol contains a link to more detailed information for Florida residents dealing with Delbert Services, Cash Call, and Western Sky loans. I replaced the previous link to the Florida action against these companies with Carol’s.