CHARLESTON, W.Va. -- A ruling this week against a predatory lending company is being labeled "a big, big win" for West Virginia consumers.
Assistant Attorneys General Norman Googel and Doug Davis detailed a $15 million decision against CashCall, which loaned money to almost 300 state residents and did it in an unlawful way.
Kanawha Circuit Judge Duke Bloom ordered CashCall to pay out $10 million in restitution to 290 West Virginians who were given no-collateral loans and additional penalties for its abuse of state lending laws.
Attorneys said consumers might not see their money for at least a year, however, if CashCall appeals that decision.
The judge issued his order Monday after six months of studying evidence and issues in the 2008 case. Bloom heard testimony in a trial last year and concluding Jan. 3.
The lawsuit gained national attention earlier this year when CashCall's owner, J. Paul Reddam and his horse "I'll Have Another" won the Kentucky Derby and the Preakness Stakes and his business background was publicized.
Googel said the state consumers affected took out loans ranging from $1,000 to $5,000 from CashCall after responding to television or Internet ads. Former "Diff'rent Strokes" child star Gary Coleman was the pitchman on many of those television ads
The West Virginia loans were made from August 2006 through March 2007 at 59 to 96 percent interest. State law caps interest on loans at 18 percent.
The Attorney General's Office received many complaints about the company and its aggressive collection tactics when consumers fell behind on payments. A lawsuit was filed in 2008.
During the bench trial, witnesses testified that CashCall would call up to 20 times a day at their home and harass them at work. They said the company made threat, including legal action, garnishment of wages and loss of home and property if they didn't pay. CashCall also contacted their family and neighbors -- also a violation of state law.
Googel said, "Consumers got in trouble right away with the loans. The company required electronic funds transfers and when the debits started bouncing, the consumers had to pay overdraft fees to their banks.