Syracuse (WSYR-TV) – The New York Attorney General’s Office has announced the filing of a lawsuit against Western Sky Financial for issuing personal loans over the internet.
The Attorney General’s Office says the company charged annual rates of interest from 89 percent to more than 355 percent, far exceeding the maximum rate allowed by a non-licensed lender in New York, which is 16 percent on small unsecured loans.
Along with Western Sky Financial, CashCall, Inc., WS Funding, LLC, and their owners, Martin Webb and J. Paul Reddam are all being sued for violations of New York’s usury and licensed lender laws in connection with their issuing of personal loans over the Internet.
All the companies are non-licensed lenders in New York State.
The companies located in South Dakota and California, have made at least 17,970 loans to New York consumers, lending more than $38 million in principal since 2010 according the Attorney General’s Office.
New York consumers owed more than $185 million on these loans in finance charges alone according to the Attorney General’s Office.
The lawsuit seeks a court order prohibiting the companies and individuals from engaging in further illegal lending or enforcing existing usurious loan contracts, cancellation of all outstanding loans, restitution for New Yorker borrowers of all interest collected above the legal limit of 16% interest and disgorgement of profits.
The Attorney General’s Office says the lenders also face penalties of up to $5,000 per violation for deceptive acts and practices.