"One consumer had so many overdraft fees the bank seized his entire paycheck," Googel said. "Some had their accounts closed, but CashCall would continue to debit their account."
One witness testified that the company faxed a letter to her place of employment -- Cabell-Huntington Hospital -- and threatened to visit her repeatedly, charging an additional $50 to $150 each time.
The $10 million in restitution will not be divided equally among the 290 consumers, but paid out according to how much their loan and their monetary loss. But some of those consumers stand to recoup up to $34,000.
"The judge ordered a penalty of four times the interest they were charged," Googel said. "And in addition he ordered that all outstanding debts to CashCall are cancelled. That's another $2.3 million in relief."
CashCall attempted to evade many of the state's consumer lending laws by contending it ran the loans through First Bank & Trust of South Dakota. But CashCall itself was bearing the risk of the loans.
"Very few states have challenged the 'rent-a-bank' model, we're the only ones," Googel said. "To any company that tries to do this, we are saying we're not going to look the other way.
"We're going to look at it on paper and see it's a sham, and we're going to enforce the laws," he said. "We challenged a business model that was a little complicated and that intimidated some regulators.
"But it's just a common sham and a scam, another way for a company to exploit consumers by using a loophole," he said.
CashCall continues the practice elsewhere, he said, more recently partnering with companies that claim Indian tribal immunity to similar laws. The West Virginia ruling might help some other states move litigation against CashCall along.
"It's the most sweeping debt collection ruling our office has brought about," Googel said. "It's the first actual adjudication by a court that covers so many debt collection practices and covers many things never addressed by a court before.
"And the judge imposed the penalties that the law allows," he said.Contact writer Cheryl Caswell at cher...@dailymail.com or 304-348-4832.