Olens files suit to protect Georgia consumers from illegal payday lenders

ATLANTA — Georgia Attorney General Sam Olens filed a lawsuit in Fulton County Superior Court 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 alleges that the companies make illegal payday loans in Georgia through websites that they operate. The Pay Day Lending Act, a Georgia law, specifically prohibits the making of payday loans, including the making of payday loans to Georgia residents, including those in Clayton County, through the Internet, Olens said.

“The law is clear that payday lending is illegal in Georgia,” said Olens 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.”

Although the defendants are not licensed to lend in Georgia, they make high interest payday loans to Georgia consumers over the Internet, he said. These loans carry interest rates of up to 340 percent and trap the borrower in a cycle of debt, said Olens. For example, a consumer borrowing $2,600 from the defendants will ultimately pay more than $14,000 in principal and interest over the life of the loan, said Olens.

The Georgia Attorney General’s Office and the Governor’s Office of Consumer Protection said they have received numerous complaints regarding Western Sky’s payday loans. Among the complaints are allegations 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. There have also been a large volume of complaints about CashCall’s collection practices, said officials. Consumers have reported that Cash Call representatives have harassed them with repeated telephone calls, obscene and abusive language, threats of wage garnishment or other legal action, and even going so far as to call consumers’ employers to threaten wage garnishment, said Olens.

Prior to filing suit, the Attorney General’s Office said it made numerous attempts to resolve the issue outside of court. 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, said Olens.

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, said Olens.

Investigations revealed that Western Sky and CashCall collaborate in the offering, making and collection of payday loans to consumers in Georgia. Western Sky Financial is owned and operated by Webb, said Olens.

CashCall acts as the servicer of the loans and manages the collection of payments, he said, and 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, Olens said his office is seeking to have 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.