ALBANY, N.Y., Aug. 13 (UPI) -- New York Attorney General Eric T. Schneiderman filed a lawsuit against personal loan companies for charging annual interest rates as high as 355 percent.
The lawsuit was filed Monday against Western Sky Financial, LLC, CashCall Inc., WS Funding LLC, and CashCall owner J. Paul Reddam and Western Sky owner Martin Webb.
The companies charged annual interest rates of 89 percent to more than 355 percent, higher than the maximum rate of 16 percent allowed for lenders not licensed by New York state.
"Western Sky and CashCall charged exorbitant interest rates on their loans to scam New Yorkers out of millions of dollars," Schneiderman said in a statement. "With this case and others, my office will continue to fight to protect New Yorkers from illegal business practices and stop companies that seek to prey upon consumers facing tough economic times."
In one instance, an Orange County resident took out a $2,600 loan from Western Sky and was told his payments would total $13,000 when they ended in 2016, the Los Angeles Times reported.
In 2010, the three firms issued loans worth more than $38 million to New Yorkers and were owed as much as $185 million in interest and fees, more than five times the original loan amounts.
The lawsuit seeks a ban on further illegal lending, the cancellation of all outstanding loans, restitution for New Yorkers who paid above the legal limit of 16 percent and disgorgement of profits. The lenders could also face a $5,000 penalty for each violation for deceptive acts and practices.
