PHOENIX — Arizonans who were coerced into taking out a fraudulent loan from CashCall may be entitled to receive some financial restitution.
Arizona Attorney General Mark Brnovich said Wednesday an agreement to resolve a lawsuit against CashCall is on the table that would obligate the company to pay $4.8 million to the state.
CashCall is accused of allowing Arizona consumers to take out personal loans with illegal interest rates as high as 169%.
Brnovich's office claims CashCall engaged in deceptive loaning practices under a company named Western Sky.
"Of the approximately $41 million that CashCall unlawfully collected on the WS loans, nearly $26 million of that amount was interest, thanks to the extraordinarily high-interest rates charged on the WS Loans," court records state.
In addition to providing restitution for consumers who were harmed, the proposed court agreement requires defendants to cease all collections and to forgive all outstanding loans in Arizona. The defendants also are prohibited from engaging in any further lending activities that are not in compliance with Arizona law.
A consumer restitution fund is being established for payment of refunds to eligible consumers. Once the proposed judgment – pending court approval – is approved, borrowers who are eligible to receive a refund will receive a check in the mail.
“Our office will not tolerate unscrupulous lenders preying on vulnerable Arizona consumers,” Brnovich said in a statement. "... this case is emblematic of our commitment to hold all companies accountable for any deceptive actions or predatory lending practices.”
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