UPDATE: W.Va. Judge Orders CashCall to Pay $13M Penalty

By: The Associated Press Email
By: The Associated Press Email

UPDATE 9/11/12
CHARLESTON, W.Va. (AP) -- A West Virginia judge has ordered a California-based loan company to pay a $13 million civil penalty and cancel all debts owned by its clients in the state.

Kanawha County Chief Circuit Judge Duke Bloom issued the penalties against CashCall Inc. on Monday.

Bloom said the company used predatory lending practices and harassed borrowers who fell behind in payments.

The West Virginia Attorney General's Office began investigating CashCall in 2007 after receiving complaints from consumers. The office said CashCall charged interest rates of more than 90 percent. West Virginia consumer protection laws limit these rates to 18 percent.

A lawyer for the company, Bruce M. Jacobs tells the Associated Press that CashCall believes Bloom's order is wrong and it likely will be appealed.

CHARLESTON, W.Va. (AP) -- West Virginia's attorney general's office is taking its allegations of unfair practices against an Internet loan company to a judge.

Kanawha Circuit Judge Duke Bloom began hearing witnesses Monday during a bench trial of the 2008 lawsuit filed against CashCall.

The attorney general's consumer protection division alleges the online lender wrongly charged huge interest rates to state residents. Witnesses told Bloom of being bombarded with harassing phone calls once they fell behind on payments.

But a lawyer for CashCall reminded several of Monday's witnesses of the terms they agreed to when they applied for their loans. The company works with a bank in South Dakota, and says it follows the relevant laws in that state.

The company became known through TV ads featuring the late former child actor Gary Coleman.

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