Loan company and its officials accused of operating illegally in NH
December 17. 2013 11:18AM
CONCORD - A predatory online loan company, charging more than $50,000 in interest on a $10,000 loan, is operating in violation of New Hampshire law, according to state and federal authorities.New Hampshire Attorney General Joseph A. Foster, in a news release, said the federal Consumer Finance Protection Bureau (CFPB) field an action in U.S. District Court in Massachusetts Monday against CashCall Inc., WS Funding LLC, Delbert Services Corp. and J. Paul Reddam alleging they violated the federal Consumer Protection Act by buying, servicing and collecting on consumer installment loans that state laws rendered void or which limited the collection of those loans.The CFPB complaint alleges, in part, that the defendants issued the loans in violation of New Hampshire state law.Foster said that on June 4 the N.H. Banking Department issued a cease and desist order against CashCall and the others alleging they made payday or small loans to New Hampshire residents without obtaining a license to do so in violation of state law. The banking department also alleged they engaged in unfair and deceptive acts and practices in connection with the loans.CashCall is currently appealing the order. The banking department, however, learned that despite the cease and desist order, CashCall continued its practice. As a result, it referred the matter to the attorney general to seek enforcement of the order in Superior Court.The attorney general also is joining the CFPB, Colorado and North Carolina in the federal action against CashCall and the others.On its online website, CashCall says it issues personal loans for up to $25,000 with interest rates as high as 89.68 percent for a $10,000 loan payable over seven years at $743.49 a month. Someone taking out the $10,000 loan would pay a total of $62,412, or more than $52,000 in interest or more than five times the loan amount.