About 5,000 people in Colorado will share in a multi-million settlement after lenders were ordered to repay excessive and illegal loan costs, according to Colorado Attorney General Cynthia H. Coffman.
The attorney general reached a settlement with CashCall Inc, WS Funding, Delbert Services Corp. and J. Paul Reddam to resolve allegations that they made, serviced and collected high-cost loans in violation of Colorado’s consumer credit protection laws.
According to the attorney general, the four companies made personal loans — and some of them had annual percentage rates exceeding 355 percent. In some cases, consumers paid more than five times the amount they borrowed in unlawful fees and interests.
The consent judgment entered by the Denver District Court requires Defendants to pay $7,384,005.12 in disgorgement and restitution. Attorney General Coffman is sending that money back to impacted consumers. The defendants also are permanently prohibited from directly or indirectly servicing, collecting, or attempting to service or collect consumer loans in Colorado.
“I am pleased to be returning money to Coloradans who were ripped off by these unscrupulous operators,” said Coffman in a statement. “This is not the way we do business in our state.”
This is the second settlement that the state reached in connection with these loans. Defendants had an arrangement with Martin A. “Butch” Webb and his company, Western Sky Financial, that required the company to take assignment of the unlawful and usurious loans immediately after Western Sky originated them. In January 2014, the Denver District Court entered a consent judgment requiring Western Sky Financial, Webb and other South Dakota lenders to pay $565,000 to the state and permanently prohibited Webb and his companies from making or collecting consumer loans to Coloradans. Nearly $8 million will be returned to Colorado consumers from the two settlements. Checks have already been sent to consumers involved in the loans.
To learn more about consumer loans and credit or debt collection in Colorado, to file a complaint, or to verify whether a supervised lender or debt collector is licensed in Colorado, please visit www.coag.gov/ccu.