Created: Mon, 29 Jul 2013 02:22:00 EST
Updated: Mon, 29 Jul 2013 02:38:19 EST
Georgia Attorney General Sam Olens filed a lawsuit Friday against Martin A. Webb, Western Sky Financial, LLC and CashCall, Inc. demanding that the payday lenders immediately cease doing business in Georgia.
The Attorney General’s office claims the companies make illegal payday loans in Georgia through websites that they operate.
The Pay Day Lending Act prohibits the making of payday loans in Georgia, including loans to Georgia residents through the internet.
“The law is clear that payday lending is illegal in Georgia,” Olens said in a statement. “The defendants’ utter disregard for the law of this State will not be tolerated. I have taken the necessary legal action to enforce the law and ensure that these unscrupulous lenders will no longer be able to exploit Georgia consumers.”
None of defendants is licensed to lend in Georgia, but their internet services make loans to Georgians at rates of interest up to 340% and trap the borrower in a cycle of debt, the attorney general's office said in a statement.
The attorney general's office and the Governor’s Office of Consumer Protection have received numerous complaints regarding Western Sky’s payday loans, the attorney general;'s office said.
These include that Western Sky continues to electronically withdraw funds from consumers’ bank accounts to collect high interest payments even though the consumers have repaid the full amount of the principal on the loan, the statment said.
There have also been a large volume of complaints about CashCall’s collection practices. Consumers have reported that Cash Call representatives have harassed them, even calling employers to threaten wage garnishment.
Prior to filing suit, the Attorney General’s Office made numerous attempts to resolve the issue outside of court, according to the attorney general's office.
In May 2012, Western Sky agreed in a letter to the Attorney General to stop making payday loans in Georgia and to add a disclaimer to its website stating that the payday loans are not available to Georgia residents, the office said. However, since that time, Western Sky has continued to offer and make such loans in Georgia and has not responded to correspondence from the Attorney General’s Office on the matter, the office said.
Western Sky Financial is owned and operated by Webb. CashCall acts as the servicer of the loans and manages the collection of payments. CashCall also offers payday loans which are funded by Western Sky.
In addition to asking the court to prohibit the defendants from making payday loans in Georgia, the Attorney General is seeking that the court declare any pending loans null and void and enjoin defendants from further collection of payments. The complaint also seeks civil penalties and attorneys’ fees.
The complaint was filed in the Superior Court of Fulton County.