CashCall settles with Brown over its lending practices
Jerry Brown (D)
SACRAMENTO, Calif. (Legal Newsline)-Fast money is not always easy money. Desperate consumers were finding that out the hard way, said California Attorney General Jerry Brown.
CashCall Inc., an Anaheim-based lender has been ordered by the courts to stop misleading consumers with false advertising tactics and has been ordered to pay $1 million in civil penalties and legal fees.
CashCall is owned by Paul Reddam, founder and former owner of DiTech Mortgage Company. CashCall currently charges 139.34 percent interest on a $2,600 loan, which the monthly payment is $298.94 for 36 months. At the end of the loan the consumer will have paid $10,761.84. That is more than $8,000 in interest to the loan.
"CashCall preyed on consumers desperate for cash, charging triple digit interest rates and using loan shark tactics to collect on their debts," Brown said.
In the complaint, Brown contends the company used illegal and abusive collection practices which include: excessive and verbally abusive phone calls at all hours, causing borrowers in incur bank fees by trying to collect repeatedly even while know the consumer did not have the funds in the bank, threatening to call the police and garnish wages without basis to do so, discuss private financial information with consumer's friends and co-workers, failed to cancel automatic withdrawals once the consumer had made the request and continued contacting consumer by phone after receiving request that all contact be made in writing.
The court order requires CashCall to, among other things, stop the excessive phone calls, pay $1 million in civil penalties and legal fees, train employees within 30 days to ensure compliance, fire any officer, director or employee who violates the terms of the judgment, record all phone calls made to or from prospective borrowers and maintain a detailed log of all consumer contacts.
"This judgment forces CashCall to stop harassing its customers and should serve as a warning to consumers to be wary of fast-money lenders," Brown said in a statement.