|January 12, 2017
Contact: Whitney Ray
Phone: (850) 245-0150
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TALLAHASSEE, Fla.—Attorney General Pam Bondi and Office of Financial Regulation Commissioner Drew Breakspear today announced coordinated settlements with the operators of an online lending scheme. The operators of the alleged scheme are Western Sky Financial, LLC, CashCall, Inc., WS Funding, LLC, Delbert Services Corporation and John Paul Reddam, who is President, CEO, owner and director of CashCall. Attorney General Bondi and OFR filed a joint action against the lenders in Hillsborough County Circuit Court. OFR also filed a separate administrative case.
These settlements, in coordination with a pending Florida class action settlement against CashCall and Reddam filed in the U.S District Court for the Southern District of Florida, resolve allegations that the lender offered, serviced and collected on Western Sky loans to Florida borrowers with illegal interest rates of more than 18 percent. Subject to final court order in the class action, the settlements collectively provide more than $27 million in monetary relief to Floridians.
“Lending schemes harm consumers seeking financial assistance, and with these settlements, Florida borrowers will now be better protected from such business practices,” said Attorney General Bondi. “Thanks to a great partnership with the Office of Financial Regulation, Floridians will receive millions in restitution.”
Commissioner Drew J. Breakspear said, “I applaud the diligent efforts of our agency’s Division of Consumer Finance investigative team and the Florida Attorney General’s Office to protect Floridians from illegal business practices. Ensuring the financial industry is safe for consumers to do business is a top priority.”
Under the settlements, approximately 14,000 borrowers are expected to be eligible for a cash payment from a combined fund of more than $11 million. To be entitled to share in the fund, borrowers must have taken out a loan from these lenders and paid back more than principal plus 18 percent interest. Eligible borrowers will be contacted once payment details become formalized and refunds will vary based on the amount paid.
The settlements collectively include the following:
- The lenders are prohibited from enforcing or collecting an amount of more than $15 million in outstanding loan balances;
- The lenders are banned from future lending in Florida, including collecting, funding, making, offering, selling, servicing, soliciting or transferring any loans;
- CashCall’s lending license is revoked;
- John Paul Reddam is barred for life from obtaining any lending or other license from OFR; and
- The lenders are required to request the credit bureaus to remove any credit reporting entries relating to these loans appearing on borrowers’ credit reports.
To view the Attorney General’s Office and OFR’s joint stipulated judgment, click here.
To view a copy of the final order for OFR’s administrative case, click here.
To view the preliminary approval order in the pending class action settlement, click here.
For more information regarding the settlement, click here.