"Loan Shark" Debt Tactics

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Cash Call was forced by Attorney General Edmund G. Brown Jr. to stop their use of "loan shark tactics" in collecting debt, including invective calls at all hours of the day and night and empty threats of law enforcement action. The court-ordered judgment also let the CashCall to stop distorting consumers with false advertising and pay $1 million in civil penalties and legal expenses.

Brown added that
Cash Call exploits consumers hunger for cash by charging triple digit interest rates and use the loan shark tactics to collect on their debts. This kind of judgment pushed Cash Call to put a period on harassing their customers and should serve as an advice to consumers to be guarded of fast-money lenders.


It's a big mistake to believe that Cash Call's advertisements really suggest a low interest rate loans that would be available to all the borrowers. The fact is, the rates advertised were offered only to those borrowers that are members of the military. CashCall offered lower interest rates because Federal law limits the interest it can charge on loans to active duty service members and their families.


The End Illegal Debt Collection Practices

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Debt collection practices are not new to our society. They were introduced when people failed to pay off debts. At the present time, in the situation of financial recession, even more people fail to pay back their loans. The reasons for that are diverse: sudden unemployment, salary cut, etc. Now people cannot afford to pay those interest rates which seemed quite affordable a year ago. Thus, financial institutions have to intensify their debt collection activity.

Those who did not deal with Cash Call,
may know nothing about the interest rates charged by the company. The percentage ranges from under 4% up to 150% per annum. As a result those customers whose rate is over 50% can hardly ever pay off their credit and they undergo the harshest debt collection actions. Attorney General Edmund G. Brown Jr. forced Cash Call, Inc. to stop using "loan shark tactics" in collecting debt, including abusive calls at all hours of the day and night and empty threats of law enforcement action.

The court-ordered judgment also forces Cash Call to stop misleading consumers with deceptive advertising and pay $1 million in civil penalties and legal expenses. Cash Call used former child actor Gary Coleman as its television spokesman.

As they say, for some the crisis is a chance to make money and not lose it. The company earned profit on consumers desperate for cash, charging triple digit interest rates and using loan shark tactics to collect on their debts, according to the Attorney General.
Brown announced that Cash Call used illegal and abusive debt collection practices in case a client could not his make payments on-time. The company acted in violation of California Business and Professions Code. In particular, the company made excessive and abusive telephone calls at any hour of the day or night. Cash Call representative also caused the debtors to incur bank fees by repeatedly trying to collect payments despite knowing there were insufficient funds in the borrowers' accounts. They threatened customers to initiate law enforcement and wage garnishment proceedings against them with no actually legal basis for that. Another unacceptable practice was to discuss the borrower’s private financial matters with his close people. No matter who those people are, a financial institution has no right to distribute such information whatsoever. The company also failed to honor borrowers' requests to cancel automatic withdrawals from checking accounts.

These are very few unlawful and humiliating steps the company undertook to collect its equally unlawfully high interest rates from the customers.