Online loans from Western Sky Financial and Cash Call
My friend David in the State of Florida was going through some serious hardship. So serious that 3 of his vehicles were repossessed and his electricity was turned off. The vehicles were impounded and the cost to take them out was a total of $12,000.00. His wife went into a very depressed time and was in bed for almost 2 weeks straight not wanting to eat because of the situation. He didn't want to see his family go through this situation and saw an advertisement on TV from a company called Western Sky.
They offered him $10,000.00 cash advance with a payment plan of $743.49 a month @ 89% interest rate. David did not have any financial concept or understanding as to what this meant. He was under the impression that his payment of $743.49 was going towards the money he owed. After 3 months of making these payments his wife saw the statement and realized that the balance on the account was increasing tremendously instead of decreasing. She flipped and started to cry because she knew he had gotten himself into a much deeper whole instead of getting them out of hardship. She called me and ask for help.
I informed that she should try investigating the laws in Florida regarding cash-advances because there should a cap on the interest they charging.. I know for a fact that hard-money can only go up as 18% interest in most states.. but I am not familiar with the laws in Florida regarding revolving accounts or cash advances.
When Western Sky contracted David to give him the loan, another 3rd party company by name of Cashcall based out of California is the one that who is actually withdrawing the money out of his account every month. Why do they have two companies I'm not sure. So I dug a little deeper and found that Cashcall is a registered company in the State of California (C2210310 01/28/2001 ACTIVE CASHCALL, INC. NATIONAL REGISTERED AGENTS, INC) but Western Sky is not.
At this point we don't know what to do to protect David's rights as a consumer or who to go to get help. He does intend to pay the money back, but he wants a fair and decent amount to go towards his principal. I think at this point he's getting ripped off. Can you please help David?
How do we act on protecting David's consumer rights and how do we help him avoid getting ripped off?
—Claudia Torres
Short answer
The interest on these online loans is illegal in many states. Western Sky Financial argued it was a tribal lender operating from the Cheyenne River reservation in South Dakota, and that argument has not gone well in the courts. If the payments are not affordable, the realistic options are to pay only toward principal, close the account the drafts come out of, and file a complaint with your state regulator.
Key points on this page
- Western Sky Financial appears to operate from the Cheyenne River reservation in South Dakota. The same operators have ties to several other online loan brands, including Payday Financial, Big Sky Cash, Lakota Cash, Great Sky Finance, Four Seasons Cash and Red Stone Financial.
- The amount and rate of interest these loans charge are illegal in many states. The tribal lender defense raised against state, federal and individual actions does not appear to be going well.
- One option is to keep paying, but only in an amount you can afford, and only up to the principal of the loan.
- Other options are closing the checking account the payments are auto drafted from, and filing a complaint with your state financial regulation office.
- At the time this page was written, Western Sky was not licensed in Florida, and the state of Florida had an active lawsuit against them.
- Expect collection calls and letters from Western Sky, CashCall, or both, if you stop paying. If finances stay tough, or things reach the point of vehicles being impounded and power cut off, it is time to speak with a bankruptcy attorney.
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.
About Michael BoveeMichael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry. He is available to speak with you about your financial struggle and helps people resolve their debt problems daily.
Here is the link for everyone here who lives in NYS and had or has a loan with Western Sky
http://www.westernskysettlement.com
What if i already paid them off and later find out that they were never authorized in my State? What do i do?
Has your state instigated an action? If you are not sure, contact your state AG’s office and inquire. Post what you learn and lets go from there.
I have a few questions for Michael and anyone else that has some input. Michael, I noticed in the initial question from the person in regards to his friend Dave in Florida, you made the comment about “if you check the State of Florida records, you would find Western Sky is not licensed in the State of Florida. Can you tell me or anyone tell me where they have gotten a definite “YES” from a lawyer etc., that Western Sky HAS TO BE licensed in the state that they are doing the loans in even being a “Tribal Lender”? I am only asking this because so far, alot of the lawyers I have asked have no familiarity with this type of a situation and the rules around a business being on Tribal Land etc. Also, does the originator of the loan which was CashCall, have to be licensed? I am finding in Texas that neither of them are registered. Most of what I am seeing is the fact that States are winning because they do not allow by law “payday” loans. But has there been any that have even ruled in favor of those who had an installment loan with Western Sky? Ok now for my next question to you Michael: If Delbert Services is strictly a “collection agent” for Western Sky/Cash Call and all they are hired to do is to ACH payments out of my account and apply to my loan etc., do they legally have the right to be responding to formal requests from Western Sky? For example, I sent them a Cease/Desist letter to Delbert Services which states among other things that I would only deal with the original creditor. Well, Delbert Services is answering all legal questions and requests. I have not received anything or heard from Western Sky or WS Funding LLC which is who they sold it too. So how can they do that? I appreciate any input from anyone!!! I have sent a complaint to the CFPB and am waiting to see what they say. Also, anyone else from Texas have anymore info in regards to this please let me know. Thanks!!!
Linda – I cannot offer you any definitive feedback on the tribal lender angle not requiring state registration. The ins and outs of companies operating off reservation, but governed by tribal laws, would be a highly niche area of legal practice. Treaty law probably does not translate into commercial and consumer laws all that well.
Western Sky pretty much ceased existing at this point. How Delbert gets to respond to you and others, or collect payments from people, is not something I can answer specifically. But generally, there would be some type of legal transfer, or master servicing agreement, from one company to the other.
IMMEDIATELY file complaints with the Attorney General’s Office and with Consumer Finance Protection Bureau. Send Delbert Services an email telling them to stop drafting from your bank account. If you have paid back as much as you borrowed, you don’t owe anything else. When all the lawsuits are settled, you will probably get money back.
got a call this morning from the investigator in the new jersey AG office friday the 7/25/14
everyone must have your paper work in they need a copy of the loan details before friday
to Troy Dayton
Investigator 1
Enforcement Bureau
P: 609-984-2777, Ext. 50230
F: 609-292-5461
Address – Regular Delivery:
NJ Department of Banking & Insurance
Division of Banking – Enforcement Bureau
P.O. Box 040
Trenton, NJ 08625-0040
Attn: Troy Dayton
case #Docket No. 14-014322 – Western Sky Financial / Cash Call / Delbert Services
better get you paper work in guys he said no only will they have to fix you credit report, but all the money paid to they has to be returned right now there are only 90 people on the file!
Busy day for Cash Call and Delbert Services updates. Thanks Curtis.
I am pleased to say that this morning the Banking and Securities Commission approved the Consent Agreement and Order negotiated by the Bureau of Compliance and Licensing with CashCall and its affiliates – collectively “CashCall.” The basic terms of the agreement are as follows:
1) CashCall will remove all credit reports for all Pennsylvania consumers, both positive and negative reports, and will not report to credit bureaus going forward;
2) CashCall will cease and desist from making new loans without a license or advertising new loans on behalf of themselves or others;
3) CashCall will reset all Western Sky related loans to 6% interest on the outstanding balance.
4) CashCall will not sell or assign any more loans to third parties
5) Consumers will retain their rights to pursue a cause of action under the Loan Interest and Protection Law on an individual basis.
6) CashCall will pay $1,000,000 for restitution and costs over a two year period to be distributed by the Department as it sees fit.
7) Monthly payments will not change in amount which means that any outstanding balance will amortize far more quickly.
8) CashCall agreed to work with those needing to change the monthly payment amount due to hardship on an individual basis, although it is not part of the agreement, but consumers should understand that will result in a longer amortization and therefore greater interest overall.
9) The Department will work with those who had First Bank of Delaware related loans separately given the agreement does not reset their interest rates.
10) The Department will likely require some information from consumers to verify balances as of today’s date.
11) CashCall will be notifying everyone of the change to their loan to 6% interest, except First Bank of Delaware related consumers.
12) The Bureau will be pursuing the third parties that have been assigned/or purchased loans from CashCall. Loans sold to third parties will not be reset to 6% because CashCall no longer owns those loans.
13) Delbert Services is part of the agreement and is not a third party
This is the agreement reached between pa and cashcall/Delbert services although it addresses a lot of issues it still harms the consumers whom filed a complaint by resetting there loans to 6% interest so if you already paid them the principal and the 6% you are going to have to pay them again the principal plus the 6%.Unless pa plans to give money back to the consumers whom already been harmed as part of the 1million restitution that they paid.I find this order to be harmful to the consumers whom filed a complaint!!!!!!!!
Thanks for posting this update about the Pennsylvania settlement with Cash Call Rocco.
Sorry it took so long but my comp has been down had to get it fixed.
Forgot to add it also doesn’t addresse the interest and penalties that are going to be imposed by cashcall/Delbert services because of being advised by the dept of banking not to pay them beyond the principal and the 6% in which case that is what I did being they are the people whom are the going after these entities!
Has anyone heard an update for the lawsuit in NC?
Michael
Hopeing you can get me some advise ! I see on my credit report a Charge off from Delbert ! This was posted in May !! I just now got another email and now it states my creditor as Consumer Loan Trust ! And the balance just keeps going up ! Paid these predators 7,886.00 on a 5000.00 loan ! If it is a charge off, why are they still contacting me ?? Who in the world is this !!! HELP ! Still waiting on NJ to Do something !!!
Current Creditor: Consumer Loan Trust
DSC Account #: 10866586
Current Balance: $9333.82
This is your opportunity to save hundreds and even thousands of dollars on your WesternSky Financial account, account number 10866586.
We want to resolve this matter as quickly as possible and avoid further action, so we are proposing the following settlement offer:
� One lump sum of $2533.07 due and payable on or before July 31, 2014. This is a 50% reduction of the outstanding principal balance.
Or:
� 9 payments of $337.74, beginning (no later than) July 31, 2014. This is a 40% reduction of the outstanding principal balance.
Upon receipt and clearance of your payments as agreed, we will notify our client to update its records accordingly regarding this settlement.
Charge off is an accounting term that lenders follow, that also permeates credit reporting when accounts go unpaid. When accounts charge off, they do not go away, and the debts are still collectable. The trend with banks and other lenders is to refer to outside collections after they charge off an account. That could be what has happened here with Delbert Services. Another bank and creditor trend is to sell their non performing accounts, or charged off debts, to investors at a steep discount. I can also read your comment as Consumer Loan Trust having acquired some Delbert debts.
Would you mind forwarding the email you got to me?
Does Consumer Loan Trust appear anywhere on your credit reports?
Michael thanks for the prompt reply !! No my credit report stated Delbert Services. I did copy the email in my post, however I am happy to forward the email to you. At what address ? Also any updates on where the great state of NJ stands with WS ? haven’t heard any updates from AG office or the CFPB.
Thanks !!
Hi Double D,
I recieved the same via mail from Delbert services but it states Consumer Loan Trust in the body of the letter. Also I researched their name and i could not find anything about them. My letter list Delbert services and their address and website so im assuming they are one in the same and trying to get you to pay it anyway.
This is what I intend to do with your email Double… research to make a connection with whatever information I can pull from what you received.
My email address is the same one you get site comment notification emails from.
I do not have any updates to provide with regards to New Jersey, but there were announcements out today from Pennsylvania. I will post more about that tomorrow.
Thanks for sending the email to me Double. Based on what I have reviewed, Consumer Loan Trust owns the account, and Delbert Services services/collects.
Hi Michael, do we need to respond to the notices from Consumer loan Trust. I did not receive an offer letter just a letter requesting verification that the debt is valid. I was going to either ignore because of our state laws or go ahead and send a reply explaining the loan is considered illegal in indiana. any suggestions would be great.
When I read your comment it sounds like you are saying Consumer Loan Trust has sent you a letter asking for you to confirm that you owe a debt. Is that correct?
Yes, that is correct….
I would like to see that letter. If you are okay with sending that to me, you can scan and email me using the same address you get these comment notifications from.
yes I can do that tomorrow
I have been dealing with the whole Western Sky/Cash Call/Delbert Services for the last six months as well. I paid back the principle plus $500 when I found out about the lawsuit. Western Sky/Cash Call are illegal in my state (there is an interest and fee cap). I stopped payments, sent a cease and desist. I receive a letter yesterday from the Consumer Loan Trust (which also has Delbert Services on the letterhead and footer) saying I have 30 days to dispute the loan and further action might be taken etc. Anyone else get this? What should I do. I filed a complaint with the National and State Consumer Loan/Protection already and Delbert wrote back the standard “why this loan is valid”. My state has not issued a lawsuit but says the loans are not collectable because they were illegally made by Western Sky who is not and has never been licensed in my state.
i too live in new jersey this is what i have done i sent letters to cash call and delbert services
new jersey laws state interest limits no more than 30% payday loans are not legal in new jersey i also sent the copys of the complaints to new jersey banking and feds i also took a photo of the complaint i sign for the criminal charges on cash call and delbert services with the state of new jersey i also sent copys to the experian. so it still shows as a write off not sure why some illegal items still show on credit reports
i had recorded my call to western sky where they said they were bonded in new jersey banking dept which was a lie!
I am in over my head with online payday loans. I live in Louisiana. I initally took out the loans to help financially and began paying them back timely. Crisis hit and I was not able to pay them back in the amounts requested. I contacted the companies and they gave me terms that I could not afford and the funds are not available. The companies still ran the amounts on my bank account thus creating more debt for me since the funds were not available. I have tried to contact the companies to offer payments that are affordable and on a different bank account. Although they stated they cant refuse a payment, what im offering is not good enough and my account will eventually be sent to collections. I dont know how to resolve this issue. I dont want to run from my responsibilities and pay my deby but I need them to work with me. HELP! . I have 5 payday loans. I owe check into cash $355.27, advance America $270.10, moneykey $385.00, cash net $210.00 and ace $300.00. I also have one personal loan that I’ve fallen behind on. That balance is $2300.00
Hi Michelle, I was way over my head in payday loans, I enrolled in CCC – Credit Counselors Corporation. They took out $267 every two weeks, they contact the creditors to set up payments plans. It helped me a ton. Once they are paid off try your damnest not to take out loans again. As we both know, they do nothing but get us in more trouble and it’s a hole that is so hard tdig out from. try Consumer Credit counseling services 800-850-2227. The link below is the yellow pages, start with one and they can help you or direct you to a location close to you.
yellowpages.com/metairie-la/consumer-credit-counseling-services
HI Kelly,
Have you heard anything from, the IN AG office yet? I have contacted them but have not received any responses.
Good mornng Nikki, I have not heard anything , I don’t think this a priority to them. I am still waiting to see what’s going on with the CFPB case, last I read they wanted the to case to be moved to California. I sure hope there will be positive outcomes for all of us involved.
Okay thank you!
oh and we live in the state of ohio
My husband took out a loan over 2 years ago. It was worth $2600. However they kept approximately $500 of it for their own fees. We were in a bind so we didn’t know any better and needed the money. IN the meantime, we have been paying $294. 98 since July 2012. If you add this up that is $6784.54. Technically according to Delbert who took over we still have over a year left to pay. I think this is ridiculous. I have read the threads above and wanted to know what your advice is on what to do. Do we stop payments as some of your suggest? Do we call the attorney general? I feel we are being robbed. The man my husband first set this loan up with stated it wouldn’t be high interest. Well obviously he lied. Anyone have any idea of what we can do? Is there a way to get a portion of this back? I live in the state of Ohio
FYI:
Jun 13, 2014, 2:37pm PDT Updated: Jun 13, 2014, 2:44pm PDT
State moves to suspend license of consumer lender CashCall
Enlarge PhotoMichael G Smith | iStock
California Department of Business Oversight said Friday it is seeking to suspend the license of CashCall Inc. for violating the state’s lending laws.
Mark Anderson
Staff Writer-
Sacramento Business Journal
Email | Twitter | LinkedIn | Google+ California Department of Business Oversight said Friday it is seeking to suspend the license of CashCall Inc. for violating the state’s lending laws.
The department served the company an accusation last week. The company has the right to request a hearing on the matter, said Mark Leyes, director of communications with the Department of Business Oversight.
The lender is based in Orange, in Southern California. Founded in 2003, the company advertises heavily on television.
The state alleges that the company violates California Finance Lenders Law in making personal loans and servicing them. CashCall also is accused of making misleading representations and omitting materials. It also is accused of pitching customers to take out larger loans than they want or need.
The California Finance Lenders Law does not limit interest rates on loans of more than $2,500, and CashCall made loans over that amount with annual interest rates of 135 percent or more.
“The department upholds the state’s financial laws to protect consumers from unfair and deceptive lending tactics,” Commissioner of Business Oversight Jan Lynn Owen said in a news release. “CashCall’s predatory marketing and personal lending practices will not be tolerated in California.”
Read a PDF of the state’s formal accusation.
The accusation came as a result of regular regulatory examinations of the company, which is licensed by the department, Leyes said. The department also has gotten consumer complaints.
Is anyone here willing to put on here a copy of the letter they sent to cash call or Delbert etc. telling them why they are no longer paying on their loan? I am getting ready to send them a letter and would like some ideas as to how to through it all together. I am in the process of filing my complaints with the FTC and Cfpb. Not sure if I will waste my time with the attorney general in Texas because I have heard that they are rather reluctent to deal with the issue. I appreciate any help!!!
Complainant finds that, by reason of the foregoing, Respondent CashCall, Inc. (i) has
violated Financial Code sections 22108, 22159(b), 22161(a) and (b), 22170(a) and (b), and 22701
and California Code of Regulations, title 10, section 1409.1, (ii) has failed to comply with a demand
of the Commissioner, and (iii) has been disciplined by other states, and based thereon, grounds exist
to suspend the finance lenders licenses of CashCall, Inc.
WHEREFORE, IT IS PRAYED that the finance lenders licenses of CashCall be suspended
for a period of up to 12 months;
Dated: June 4, 2014 JAN LYNN OWEN
Los Angeles, CA Commissioner of Business Oversight
By_____________________________
Judy L. Hartley
Senior Corporations Counsel——————————————-California has taken action against cashcall this is just the bottom half of order.If you want to see the order go to california dept of banking and oversight enforcment actions
I took out a $5000 loan from Cash Call (now Delbert) in 2012. I have made all the payments to date and have now started to read about Delbert
I have paid close to $10,000 and feel like I have fulfilled my loan
I would like to understand how to go about stopping the payments
I currently live in NJ
In New Jersey payday loans are ileagal
If they have putit on your credit report you need to write the credit bureau that list give them a letter stating that the state laws in New Jersey also make a complian with the state banking dept sent the credit bureau a copy of that too
They can’t sue you because the loan was illegal in the first place !
For Georgia residents, I received this reply from the AG office on the status of the lawsuit:
The Attorney General’s lawsuit against Western Sky, CashCall, and Delbert Services is still pending. The Defendants filed several motions to dismiss, which the court has not yet ruled on. The court appointed a Special Master to review the legal issues, and his recommendation to the court is expected sometime this month. After that, the court will rule on the motions. If the court denies the motions to dismiss, the case will move forward.
Sincerely,
Charlene R. Swartz
Assistant Attorney General
Department of Law
State of Georgia
40 Capitol Square, SW
Atlanta, Georgia 30334-1300
(404) 656-4103
Crossing fingers and toes this case moves forward.
Release Date: June 6, 2014
West Virginia Supreme Court of Appeals Affirms $14 Million Judgment Against CashCall Inc.
CHARLESTON — Attorney General Patrick Morrisey today announced that the West Virginia Supreme Court of Appeals recently affirmed a $13.8 million judgment against California-based lender CashCall Inc. and upheld the awarding of more than $440,000 in attorneys’ fees and costs to the Attorney General’s Office.
The ruling by the Supreme Court came more than a year after CashCall and its President/CEO J. Paul Reddam appealed three orders entered by the Kanawha County Circuit Court that found the company engaged in abusive debt collection, violated state lending laws and had to reimburse the state for attorneys’ fees. The May 30 memorandum opinion by the Court said CashCall violated debt collection laws in the state, that it was a true lender in a “rent-a-bank” scheme and that the civil penalties levied upon the company were appropriate.
“This case has been very important to hundreds of West Virginia consumers who patiently waited for it to work through the appellate process,” Attorney General Morrisey said. “This ruling by the Supreme Court confirms that the debt collection activity was unlawful, the loans were unlawful, and the Circuit Court appropriately canceled the loans and imposed stiff civil penalties for CashCall’s conduct.”
According to court documents, CashCall sold predatory loans in West Virginia with interest rates of up to 99 percent APR, which is a violation of the state’s usury laws. When consumers defaulted, CashCall used abusive and harassing collection techniques.
“CashCall used the ‘rent-a-bank’ model to attempt to skirt West Virginia’s consumer protection laws,” Morrisey said. “The trial court found, and the Supreme Court affirmed, that usurious interest rates will not be tolerated in West Virginia, regardless of how cleverly the lenders arrange their business to make it look legitimate.”
The Office of Attorney General alleged that CashCall partnered with a 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. The Office alleged CashCall “rented” the bank’s name and charter to avoid certain state regulations.
In the original complaint, CashCall was accused of soliciting consumers to take out high interest loans from a state-chartered bank in South Dakota. When consumers could not repay the loans, CashCall engaged in various unlawful debt collection activities, including placing numerous calls to consumers, employers, and other third parties.
Any persons wishing to file a complaint about a consumer matter or to alert the Attorney General about unfair or deceptive practices may do so by calling the Consumer Protection Hot Line, 1-800-368-8808, or by obtaining a complaint form from the consumer web page at http://www.wvago.gov.
The decision can be found on the West Virginia Supreme Court of Appeals website, https://www.courtswv.gov/supreme-court/opinions.html. It is case number 12-1274.
I live in the state of Pa and was wondering if you have any information on this Internet payday people? I took a loan out 7/2013 for 1,000.00 and as of march 2014 paid 114.67 every two weeks so I have paid well over the amount back the problem is I defaulted and now they charged off and sold it to national credit adjusters which are saying I owe 1,300.00. What should I do?
I would suggest contacting the pa dept of banking to file a complaint.They are the agency that is handling stuff like this!
Also the Consumer financial protection Bureau is taking complaints as far as i know1
So i check the better business bureau pretty much on a regular basis!I have sent an email to the head quarters complaining about these three entities westernsky,cashcall, delbert services.They have put government warnings an state actions,and even revoked delbert servies rating!But yet they still keep cashcall’s review updating nowthis has been going on for awhile and now they have settled with Conn and New York.Which included fines refund of monies over charged and removal of adverse affects on credit reporting agencies but yet the bbb has still not updated on this company it just shows they are protecting cashcall!!!!!
No unfortunately I am not. At one time about a month ago I had found a link to a law firm who was trying to get a class action suit against them but now I cannot find it. I am in the Lubbock Area
thought all might like to read this
Please feel free to comment or give insight. Thanks Mike
Federal Govt. Sues Western Sky, Butch Webb & CashCall -Cheyenne River Sioux Tribe’s Sovereign Status as a Shield
By Payday Loan Industry | Jul 16, 2013
By Jer Ayles-Ayler at Trihouse. A portion of the class action lawsuit filed: (Link to entire filing available below):
Plaintiff Sonja Curtis is a resident of Texas and applied for a loan from Western Sky in that state. Ms. Curtis borrowed $5,000 from Western Sky on August 8, 2011. The loan
carried an APR of 116.73 % and a fee of $75.00. Finance charges on the loan are $36,172.61 for a total payment of$41,172.61 on a $5,000 loan. She has paid approximately $5,737.34 in interest and $4.12 in principal to Defendants to date.
Plaintiff Chad Martin Heldt is a resident of Minnesota and applied for a loan from Western Sky in that state. Mr. Heldt borrowed $9,925 from Western Sky on April 24, 2013. The loan carried an APR of 89.68 % and a fee of $75.00. Finance charges on the loan are $52,676.49 for a total payment of $62,601.49 on a $9,925 loan. He has paid approximately $891.82 in interest and principal to Defendants to date.
Plaintiff Christi W. Jones (nee Trusevich) is a resident of Texas and applied for a loan from WesternSky in that state. Ms. Jones borrowed $2,525 from Western Sky on July 19, 2011. The loan carried an APR of 139.13 % and a fee of $75.00. Finance charges on the loan are $11,441.37 for a total payment of $13,966.37 on a $2,525 loan. She has paid approximately $3,635.07 in interest and $45.20 in principal to Defendants to date.
Plaintiff Cheryl Annette Martin is a resident of Virginia and applied for a loan from Western Sky in that state. Ms. Martin borrowed $1,500 from Western Sky on December 30, 2011. The fee on the loan was $500, and so Ms. Martin received $1,000. The loan carried an APR of233.91 %. Finance charges on the loan are $3,768.98 for a total payment of $4,768.98 on a $1,000 loan. She has paid approximately $1,616.47 in interest and $179.53 in principal to Defendants to date.
Defendant Payday Financial, LLC (“Payday Financial”) does business as Lakota Cash and Big Sky Cash. It is a limited liability company chartered under the law of the state of South Dakota as an ordinary business entity. Its principal place of business is 612 E Street, Timber Lake, South Dakota. Upon information and belief, Payday Financial caused the State of South Dakota to charter defendant Western Sky Financial and has served as the managing member of the entity. Payday Financial advertises and offers its loans to Minnesota, Texas, Virginia and other consumers through Internet web sites including http://www.lakotacash.com. Payday Financial transacts business in South Dakota, Minnesota, Texas, and all other states in which it offers consumer loan products. The Lakota Cash website describes the company as follows:
https://www.lakotacash.com (accessed June 12, 2013). The typical visitor to the website is an African American female between the ages of 18 and 34, with children, and income of less than $50,000 per year, and no college education. See https:llwww.quantcast.comllakotacash.com (accessed June 24, 2013). On February 9, 2011, Defendant Webb filed a Statement of Dissociation stating that Defendant PayDay Financial, LLC is dissociated from Defendant Western Sky Financial, LLC.
Defendant Western Sky Financial, LLC, is a South Dakota limited liability company with its principal place of business at 612 E Street, Timber Lake, South Dakota Western Sky advertises and offers loans to consumers by television advertisement and through a website accessible at http://www.westernsky.com.
Defendant Martin A. “Butch” Webb resides in South Dakota. Webb is the owner and president of Payday Financial and the owner of Western Sky. He is the registered agent of Payday Financial, Great Sky, Western Sky, Red Stone, Management Systems, 24-7 Cash, Red River, and High Country. Webb is the organizer, managing member, and registered agent of Financial Solutions.
Defendant CashCall is a California corporation with principal place of business at 1600 S. Douglass Road, Anaheim, California. CashCall is engaged in the business of making or arranging high-interest loans to consumers over the Internet and then servicing the loans it made or arranged. On information and belief, CashCall has arranged with the Lending Defendants (or entities affiliated with them) to process the loans from their inception or otherwise purchase loans made by the Lending Defendants shortly after they are made, or to receive the loans for collection or servicing. Upon information and belief, CashCall is aware of the terms of the loan agreements, including its exculpatory clause, and approved of those terms.
Defendant CashCall owns or operates the web servers used by the Lending Defendants to market and form the loan agreements. Upon information and belief, CashCall operates and/or funds WS Funding, which is the entity that provides the money the Lending Defendants use to fund consumer loans.
The relationship between the Lending Defendants and defendant CashCall IS close. All three entities host their public websites on TW Telecom servers based in Corona, California. Both websites became active on the TW Telecom servers within one day of each other. The servers run the same operating system and web serving software.
The websites cross-market each other. The site located at http://www.westernsky.com (which is owned by defendant Payday Financial, Inc.) includes keywords “Gary Coleman cash call” and “Gary Coleman cash loans”-referring to a 2007 ad-campaign run by defendant Cash Call that featured actor Gary Coleman.
The Lending Defendants use a website application co-developed by defendant CashCall and Cogility Software to manage the loan process. Upon information and belief, the CashCall system used by the Lending Defendants is comprehensive and includes: underwriting and decision-making, employment verification process, management of incoming voided checks and pay stub faxes through a fax queue, digital certificate generation, document creation, web based tools for loan agents and administrator[s], access to loan account information, security services, e-mail generation, loan servicing, and phone system configuration and interface requirements.
None of the Defendants is owned, operated, or chartered by the Tribe.
FACTUAL BASIS
The Lending Defendants offer high interest rate unsecured consumer loans of $300 to $10,000 through Internet websites, including to individuals throughout Minnesota,
Texas, and Virginia. The APR on the loans range from approximately 89.68 % to 342.86 %. The Lending Defendants have offered such loans since at least mid-2007. Upon information and belief, Defendant CashCall has entered into agreements with the Lending Defendants to collect debts and service the loans made by the Lending Defendants.
Consumers who require a payday loan from Defendants visit one of several websites run by the Lending Defendants. Consumers apply for a loan through an online form or by calling a toll-free telephone number.
Defendants quickly provide money to the consumer. Shortly thereafter the Lending Defendants transfer the loan note to Defendant CashCall. In essence, the Lending
Defendants act as a broker of Cash Call loans under the guise ofan American Indian Internet loan company.
If a consumer does not pay back a loan on time, Defendants attempt to collect the debt. Among other things, Defendants make negative reports to credit bureaus, call consumers multiple times per day, contact consumers’ employers, and engage in other aggressive-and often intimidating-tactics.
All Defendants knew or should have known that the loans they made to Plaintiffs and the class contained interest rates that are unenforceable because they violate Minnesota, Texas, and Virginia usury statutes.
Defendants inform consumers-including Plaintiffs and members of the class-that the Indian Commerce Clause of the United States Constitution bars application of their
states’ laws. But the Indian Commerce Clause provides no such immunity-it narrowly grants the United States Congress the authority to “regulate Commerce … with the Indian tribes.” U.S. Const. Art.! § 8. It does not state, as Defendants would have consumers believe, that American Indians are free to violate state laws without repercussion.
Notably, the Lending Defendants refuse to offer loans to members of the Tribe or to residents of South Dakota where the tribe is located.
All consumers must sign a loan agreement form to indicate they accept the terms ofthe loan. There is a reasonable question of whether a consumer sees the entire term of the loan or arbitration clause before they accept the loan.
The loan agreement includes, among other things, the following statements:
This Loan Contract is subject solely to the exclusive laws and jurisdiction of the Cheyenne River Sioux Tribe, Cheyenne River Indian Reservation. By executing this Loan Agreement, you, the borrower, hereby acknowledge and consent to be bound to the terms of this Loan Agreement, consent to the sole subject matter and personal jurisdiction of the Cheyenne River Sioux Tribal Court, and that no other state or federal law or regulation shall apply to this Loan Agreement, its enforcement or its
interpretation.
Governing Law. This Agreement is governed by the Indian Commerce Clause of the Constitution of the United States of America and the laws of the Cheyenne River Sioux Tribe. We do not have a presence in South Dakota or any other states of the United States. Neither this Agreement nor Lender is subject to the laws of any state of the United States of America.
The loan agreement takes a “belt and suspenders” approach to depriving consumers of their state law rights. The agreement also contains an arbitration provision that requires, among other things:
“Arbitration shall be conducted in the Cheyenne River Sioux Tribal Nation by a panel of three Tribal Elders and shall be conducted in accordance with the Cheyenne River Sioux Tribal Nation’s consumer rules and the terms of this Agreement.”
The document continues:
“THIS ARBITRATION PROVISION IS MADE PURSUANT TO A TRANSACTION INVOLVING THE INDIAN COMMERCE CLAUSE OF THE CONSITITUTION OF THE UNITED
STATES OF AMERICA, AND SHALL BE GOVERNED BY THE LAW OF THE CHEYENNE RIVER SIOUX TRIBE.”
Further, “The arbitrator will apply the laws of the Cheyenne River Sioux Tribal Nation and the terms of this Agreement.”
Contrary to the representations of the Lending Defendants in the loan agreement, there is no such thing as arbitration in the Cheyenne River Sioux judicial system. Further, “Cheyenne River Sioux Tribal Nation’s consumer rules” do not exist. In response to a request for information regarding the Tribe’s arbitration procedure, a Tribal MediatorlMagistrate stated, “the Cheyenne River Sioux Tribe, the governing authority does not authorize Arbitration as defined by the American Arbitration Association (AAA) here on the Cheyenne River Sioux Reservation located in Eagle Butte, SD 57625.” (Exhibit A.)
The “belt and suspender approach” of placing exclusive jurisdiction of disputes with the Cheyenne River Sioux Tribe, but at the same time, requiring arbitration pursuant to
nonexistent arbitration rules, creates a conflict within the loan agreement. This dispute cannot simultaneously be subject to the jurisdiction of the Cheyenne River Sioux Tribe judicial system and a panel of non-judicial arbitrators who are chosen solely by the Defendants and who are members of the Tribe. This violates the Federal Arbitration Act. (Exhibit 8.)
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Link to the actual filing: https://turtletalk.files.wordpress.com/2013/07/heldt-complaint.pdf
Read more: https://paydayloanindustryblog.com/federal-govt-sues-western-sky-butch-webb-cashcall-cheyenne-river-sioux-tribes-sovereign-status-as-a-shield/#ixzz33hCvx5dT
FTC Puts Texas-based Operation Permanently Out of the Debt Collection Business After It Allegedly Used Deception, Insults, and False Threats against Consumers
Operation also Charged Unauthorized Fees; Owner Will Surrender His Assets
FOR RELEASE
May 19, 2014
TAGS: deceptive/misleading conduct Finance Bureau of Consumer Protection Southwest Region Consumer Protection Credit and Finance Debt Collection
The owner of a Houston-based debt collection operation that the FTC charged used insults, lies, and false threats of imprisonment to collect on payday loans will surrender his assets, estimated to be worth $550,000, to pay restitution to consumers who were charged unauthorized fees. All the defendants will be permanently banned from debt collection under a settlement with the Federal Trade Commission.
In 2013, at the request of the FTC, a U.S. district court shut down Goldman Schwartz, Inc., froze its assets, and appointed a receiver to take control of the business while the case was in litigation. The debt collection operation did business nationwide, collecting primarily on payday loans. In some cases it owned the debt, and in others, it acted as a third-party collector. The operation was charged with multiple violations of both the FTC Act and the Fair Debt Collection Practices Act.
“Debt collectors who harass consumers, make false threats, and charge bogus fees are violating federal law and will be held accountable,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.
The defendants were charged with making false threats that consumers would be arrested and jailed, and that their children would be taken into custody; falsely claiming to be attorneys or to work hand-in-hand with local sheriff’s offices; disclosing debts to consumers’ employers and military superiors; and collecting bogus late fees and attorneys’ fees, according to the complaint.
The defendants also harassed and abused consumers by using obscene language and by calling repeatedly and at odd hours early in the morning or late at night, and failed to inform consumers of their rights to dispute the debts, have the debts verified, and obtain the names of the original creditors, the complaint alleged.
The settlement resolves FTC allegations against company owner Gerald Wright, company managers Starlette Foster and Jennifer Zamora, and several corporate defendants. The settlement requires Wright to surrender his assets, estimated at $550,000, which include funds from personal and business accounts and proceeds from the sale of realty. The remainder of a $1.4 million judgment against Wright is suspended based on inability to pay. The judgment against Foster and Zamora also is suspended due to their inability to pay. If it is later determined that the financial information the defendants provided the FTC was false, the full amount of the judgment will become due.
The monetary judgment will be used to pay restitution to consumers who were charged unauthorized late fees and attorneys’ fees, often in the hundreds of dollars. The defendants privately referred to these bogus fees as “Juice,” and used them to inflate the cost to consumers who wished to settle their debts, the complaint alleged.
Also under the order, the defendants are prohibited from misrepresenting the characteristics of any financial product or service.
As part of its continuing crackdown on scams that target consumers in financial distress, the complaint named as defendants Goldman, Schwartz Inc, doing business as Goldman, Schwartz, Lieberman & Stein; Debtcom, Inc., doing business as Cole, Tanner, & Wright; Harris County Check Recovery Inc.; and The G. Wright Group Inc., doing business as The Wright Group. Under the terms of the order, these companies will be dissolved.
For consumer information about dealing with debt collectors, see Debt Collection.
The Commission vote approving the proposed consent decree was 5-0. It is subject to court approval. The FTC filed the proposed consent decree in the U.S. District Court for the Southern District of Texas, Houston Division on May 19, 2014.
NOTE: Consent decrees have the force of law when approved and signed by the District Court judge.
The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.
PRESS RELEASE REFERENCE:
FTC Action Leads to Shutdown of Texas-based Debt Collector that Allegedly Used Deception, Insults, and False Threats Against Consumers
CONTACT INFORMATION
MEDIA CONTACT:
Betsy Lordan
Office of Public Affairs
202-326-3707
STAFF CONTACT:
Tom Carter
FTC Southwest Region
Dear Mr. Bovee…thanks for your quick response for my last question. Also, any input would be greatly appreciated on the item below in regards to them from you or anyone.
To everyone, I live in Texas and yesterday requested a copy of the communication showing where Western Sky sold my installment loan to Delbert Services because I don’t ever remember receiving anything from them and I have all of my initial communication from them. Well, I received an email back from them this morning and included was a copy of the supposed “notice of transfer and sale”. As I got to reading it, it sounded weird.
1. the “notice of transfer and sale” was dated June 4, 2014 and specifically states that effective THAT DATE, my loan was being sold from Western Sky to WS Funding LLC and that Delbert Services would be handling the payments for it starting with the first payment in AUGUST 1, 2013.
2. how can a company essentially “backdate” a notice of transfer/sale which (according to them) is effective June 4, 2014 but in the body of the sale state that the payments would be taken out by delbert which is a servicer for WS Funding in 2013? If they didn’t even sell it until today, how could they legally know who will doing the payments for WS Funding.
3. The other issue is that the first payment back in August of 2013 WAS done by Delbert Services, but then the next 3-4 payments were done by CashCall and then it went back to Delbert Services. Seems to me that could possibly be illegal. I didn’t think you could sell the loan to another company and they start payments and then you come back in and start taking the payments and back and forth between the 2 companies.
Now we all know they are playing games, but I would love everyone’s input on this.
For my part, I would suggest getting the opinion and advice of a consumer law attorney in Texas, and preferably one with trial experience with debt defenses. I know of one in Austin. You anywhere near there?
If westernsky/cashcall/delbert services is reporting negativly on your credit report,I would dispute it i just did this today and they removed cashcall and delbert services from my report.Although they didn’t say it i think they are altra aware of whats going on with these entities.I have tried to remove things in the past and it was like pulling teeth with no avail!But this time was different they removed them immediately with no hassle in my case!
Hi Rocco,
Did they remove them entirely? Also what steps did you take to dispute the accounts? I would love to remove all info from them on my report!!!!
It appears that one credit reporting agency has deleted them on my credit report however iam waiting to see if it pops up on the other 2 credit reporting agency if it does i will asked to have that removed also!I took a 7 day trial with one of them and it immediatly gave me there credit report i then called them and ddisputed it told them there are numerous states suing them including mine and the Cfpb is also suing them.The person on the phone said she would place me on hold for little while to do some research and a coupole of minutes later she said that they deleted the entries and sent me a conformation email with my corrected credit report!
So iam guessing with which the ease that they deleted it of my record that they are aware of the states actions and the government actions that are happening.Like i said i have disputed other this on my credit report to no avail getting something removed from your credit report is almost impossible!
Needs some insight here ..Michael can you advise ?
I got a 50% of princiale email from Delbert yesterday � One lump sum of $2533.07 due and payable on or before June 30, 2014. This is a 50% reduction of the outstanding principal balance.
How ironic..the loan was for 5000.00 and I paid back 8780.00 before ceasing payments! I went on to my credit report today, and Delbert has listed 5066 as a CHARGE OFF !!! Now what do I do?? I am in the state of New Jersey..how do I get this removed from my credit report and if the did a charge off in May, why still contacting me for a payment !!! UGGGG why !!! come on NJ get on the ball with these predictors !!!
any advise would be appreciated ..is it time to contact a lawyer ??
thx