COLUMBIA, SC (WMBF) – An internet-based lender will forgive $9.15 million in outstanding loans made to South Carolina consumers following an agreement with the S.C. Department of Consumer Affairs and the state Board of Financial Institutions Consumer Finance Division.
According to a press release, the agreement with CashCall, Inc. totals approximately $9.65 million. Of that amount, $500,000 was paid to SCDCA and BOFI-CFD for restitutions to certain South Carolina customers.
Regarding the $9.15 million in outstanding loans, consumers will be notified that no further payments are due, the release stated.
The agreement was reached after it was alleged CashCall, its affiliate companies and owner J. Paul Reddam violated various state consumer lending laws. That included charging fees in excess of what state law permits, according to the release.
The settlement pertains to high interest loans CashCall purchased from Western Sky Financial. It affects over 8,300 loans entered into by state consumers, which range from $700 to $10,000 and have interest rates between 90 and 355 percent, the release stated.
"This settlement should serve as a reminder to businesses that noncompliance with consumer protection laws will not be tolerated in South Carolina," said SCDCA administrator Carri Grube.