The District of Columbia has filed a consumer protection lawsuit against CashCall, a California based debt purchasing company, said D.C. Attorney General Karl Racine on Sept. 9.
The lawsuit alleges interest rates being charged for consumer loans are more than 12 times the maximum rate allowed by law. The District of Columbia has a 24 percent maximum interest rate for the collection of consumer loans, and the lawsuit alleges CashCall charged interest rates exceeding 300 percent annually.
“This company is preying on District consumers by attempting to collect loans with unlawful and unreasonable interest rates,” Racine said. “We will aggressively apply the District’s consumer-protection laws to stop predatory lending practices that harm our residents.”
The loans were sold to CashCall by Western Sky Financial, a company that is no longer in business, the suit says. Western Sky originally made the loan agreements over the Internet by using television and Internet advertising.
The lawsuit requests a court injunction to halt unlawful debt collection, restitution for customers and for civil penalties. CashCall and its wholly owned subsidiary WS Funding, as well as principal J. Paul Reddam, are named defendants.