- Loans from Cash Call and Western Sky are similar to payday loans.
- Internet loans are among the highest-interest consumer loans available.
- The CFPB filed a lawsuit against CashCall and Western Sky in December 2013.
I have a loan with a company called Cash Call that I am behind on, they are not willing to work with me. What are my options?
My question is I have a loan with a company called Cash Call that I am behind on two months actually and I have tried to call and make arrangements with them and they are not willing to work with me. What is the minimum amount of money I could send them to where they could not garnish my wages? I did contact a lawyer and wanted to file bankruptcy and I did previously in 2000 they said because it has not been 7 years I would have to wait until next May 08. I am not denying the fact that I owe the money I am just in a bad situation and want to try and just deal with there harassment until next may. If you could please let me know what I will need to do I would appreciate it.
CashCall and its affiliate Western Sky lend from $850 to $10,000 to consumers with rates ranging from 90% to 343%. A typical CashCall or Western Sky loan of $10,000 costs more than $60,000 to repay, and a $2,600 loan will cost you $13,840 over a 4-year period.
| New York Settles with CashCall & Western Sky |
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| In January 2014, the New York attorney general announced New Yorkers need to repay only the principal (and not interest) on their Western Sky and CashCall loans. New Yorkers who repaid more than the principal plus the legal interest rate of 16% should apply for a refund with the refund administrator. |
Source: NY Attorney General
According to studies by consumer groups, these high-interest loans are pitfalls for consumers. Due to their high rates and fees, studies find that borrowers are better off avoiding the loans, and working out a payment plan directly with the creditor they want to pay with the high-interest loan.
If you default on a CashCall or Western Sky loan, it can, in theory, take the same action as any other unsecured creditor to enforce a defaulted debt. Collection efforts will start with telephone calls, letters and e-mails demanding you pay the balance of the loan. If CashCall or Western Sky refers your accounts to a collection agency such as Delbert Services Corp., you can stop the telephone calls by sending a cease communications letter, commonly called a cease and desist notice. The federal Fair Debt Collections Practices Act (FDCPA) states that collection agents must stop calling you when you notify them in writing to do so.
| CFPB Sues CashCall |
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| In December 2013, the federal Consumer Financial Protection Bureau (CFPB) filed lawsuits against CashCall and its two subsidiaries Western Sky Financial and Delbert Services Corp. for unfair, deceptive, and abusive practices, including illegally debiting consumer checking accounts for loans that were void. The CFPB alleges CashCall and Western Sky loans violated licensing requirements and/or interest-rate caps in eight states, including Arizona, Arkansas, Colorado, Indiana, Massachusetts, New Hampshire, New York, and North Carolina. The CFPB wants CashCall to issue refunds to borrowers and pay penalties. |
Source: CFPB
If CashCall or Western Sky cannot convince you to pay through standard collection tactics, such as phone calls, it may decide to file a lawsuit against you to obtain a judgment for the balance of the debt. If CashCall or Western Sky sues and obtains a judgment against you, it can then take steps to enforce the judgment as allowed by your state law. The most common methods of enforcing a judgment are wage garnishment, bank account levies, and property liens.
Most lenders do not sue debtors to collect debts. A lawsuit is a worst-case scenario, which you will probably not experience. However, take a moment to learn your state's collection laws so you are aware of what actions your state allows.
Repay a CashCall or Western Sky Loan?
In December 2013, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against CashCall (PDF) and its related companies Western Sky Financial and Delbert Services Corp. alleging the companies engaged in unfair, deceptive, or abusive lending and collections practices. The CFPB is asking the court to order CashCall to refund money to consumers in states where the loans were illegal, and pay penalties.
Do you need to repay a CashCall or Western Sky loan? The answer is unclear. At least five states have filed lawsuits against CashCall in 2013 for offering residents in their states loans with illegal terms. If state courts find the loans are illegal, CashCall may need to return all of the interest and fees borrowers paid to the lender. But what do the pending state and federal lawsuit mean to you if you have a CashCall or Western Sky loan now?
The Federal Trade Commission has a great list of six alternatives to high-interest loans. Explore all of your options before choosing a high-interest loan such as those offered by CashCall and Western Sky.
Take these four steps if you have a CashCall or Western Sky loan:
- Contact your state’s bank regulator or attorney general and ask if either believe you have an obligation to pay the loan. Your state may take the position you must repay the principal (the amount you borrowed) but not the interest. Or, your state may consider the loan illegal and therefore void, and you need not repay anything. Go to the Bills.com Loan Laws, Limits & Repayment Plans By State page to find your state’s loan regulator. In some states it is a banking regulator, and in others it is the attorney general’s office.
- Take careful notes of what your state officials tell you to do with your CashCall or Western Sky loan. If your state publishes any information on a Web page about CashCall or Western Sky loans, print this information and keep it in a safe place so that you have a detailed record for the future.
- If your state asks you to do so, file a complaint about your CashCall or Western Sky loan with your state attorney general or banking regulator. You may need file a complaint so that you are on record as being offered an illegal loan, or a loan from an unlicensed lender. Accepting an illegal loan is not a crime.
- File a complaint with the CFPB so that you are on record with the CFPB as having a possibly illegal loan, or a loan from an unlicensed lender.
If you have a CashCall or Western Sky loan, stay in contact with your state attorney general or banking regulator to learn if your obligation to repay the CashCall or Western Sky loan changes. Visit the CFPB’s newsroom Web page each month or so to learn if the CFPB made any announcements about its lawsuit against CashCall.
I hope this information helps you Find. Learn & Save.
Best,
Bill