On Wednesday, the Arizona Attorney General’s Office announced a proposed consent judgment that will require CashCall, Inc., its owner J. Paul Reddam, and a wholly-owned subsidiary, WS Funding LLC, to pay $4.8 million in restitution to Arizona consumers who took out personal loans with interest rates as high as 169 percent, greatly exceeding that allowed under Arizona law.
In a lawsuit filed in March 2019, the Attorney General’s Office (AGO) alleged that CashCall, its subsidiary, and its owner violated the Arizona Consumer Fraud Act by engaging in a scheme, using a South Dakota company with a purported Native American tribal affiliation as a façade for marketing and issuing unlawful, high-interest loans to Arizona consumers. The AGO amended the complaint in May 2020 to allege a second deceptive, high-interest loan scheme it discovered CashCall had implemented shortly after winding down the first scheme in 2016 in the face of regulatory scrutiny.
In addition to providing restitution for consumers who were harmed, the proposed judgment requires defendants to cease all collections and to forgive all outstanding loans. The defendants also are prohibited from engaging in any further lending activities that are not in compliance with Arizona law.
A consumer restitution fund is being established for payment of refunds to eligible consumers. Once the proposed judgment – pending Court approval – is approved, borrowers who are eligible to receive a refund will receive a check in the mail.