De La Torre v. CashCall, Inc. (2018) 5 Cal.5 th 966. This decision is especially important because it is the first case to both interpret and explain the California Legislature’s intention to protect targeted, vulnerable Californians from gross overreaching by online consumer lenders like CashCall.
Full Answer
What happened in de la Torre V CashCall?
De La Torre v. CashCall, Inc. The Supreme Court held that the interest rate on consumer loans of $2,500 or more may render the loans unconscionable under section 22302 of the Financial Code.
Did CashCall violate unfair competition law in California?
Plaintiffs alleged that CashCall violated California’s Unfair Competition Law (UCL), Cal. Bus. & Prof. Code 17200 because its lending practice was unlawful where it violated section 22302, the section that applies the unconscionability doctrine to consumer loans.
Is there a class action lawsuit against CashCall?
Plaintiffs bring their claim under the “unlawful” prong of the UCL and assert that CashCall’s lending practice was unlawful because it violated section 22302, the section that applies the unconscionability doctrine to consumer loans. The district court certified plaintiffs’ lawsuit as a class action.
Was CashCall’s advertising deceptive?
In bringing this lawsuit in the federal district court for the Northern District of California, plaintiffs Eduardo De La Torre and Lori Saysourivong do not contend CashCall’s advertising was deceptive. Nor do they claim CashCall failed to disclose accurately the terms of the loan as required by federal law.
What is CashCall settlement?
TransUnion will pay $500,000 to end claims that it violated consumers' rights under the Fair Credit Reporting Act by reporting on collection accounts with CashCall or Western Sky... © 2022 Top Class Actions LLC.
Is CashCall out of business?
The company is now largely defunct after being buried in legal and regulatory actions. But its founder might just get away with the shady patterns that made CashCall such a profitable enterprise.
What happened CashCall mortgage?
A federal judge in Los Angeles has ordered Orange County lender CashCall and its owner, J. Paul Reddam, to pay $10.3 million for violating consumer protection laws — a fraction of the $287 million in penalties and restitution sought by a federal regulator.
Is CashCall mortgage still in business?
The mortgage division is now separate from CashCall Inc. after being purchased by Impac Mortgage Corp. in 2015. CashCall Mortgage is licensed to lend in all 50 states, though the vast majority of its loans are originated in California....How does CashCall Mortgage compare to other lenders?Lender ReviewLowerLower2 more rows•Feb 2, 2022
Is LoanMe and CashCall the same company?
A month later, Cash4Rent changed its name to LoanMe. The connections between LoanMe and CashCall extend to the companies' business practices as well. Until recently, the companies advertised exactly the same loan sizes, interest rates, terms and payments in the states where they both did business.
Who owns cash call?
The New York reported that Governor of California Jerry Brown characterized Reddam's company's debt collection methods as loan sharking. He now owns CashCall, Inc., another firm specializing in small loans at very high interest rates. CashCall settled a lawsuit against it for $5 million dollars for predatory lending.
What time does Cool FM cash call ring?
The Cool FM Downtown Cash Call is here! It's your chance to win life-changing cash, every single day! Each weekday after 5pm we make the call, but don't worry if you missed it - you can listen again right here!
What is the complaint against Cashcall?
The complaint alleges CashCall’s business practices violate numerous consumer protection and debt collection laws. CashCall makes millions of dollars in unsecured personal loans to consumers every year at exorbitantly high and unconscionable interest rates, the majority of which are in excess of 90 percent interest per year.
How does Cashcall work?
Its high interest rates, oppressive loan terms, and protracted repayment time make it impossible for most consumers who fall prey to its advertisements to pay off their loans within any reasonable time period, even to pay their loans according to a schedule without defaulting. CashCall secures its profit by collecting high interest payments, while the outstanding principal balance is barely reduced while pumping its customers’ loan balances up by adding on late fees and insufficient fund charges. Once a customer falls behind in payments, CashCall turns to coercive collection practices to keep the customer paying. A significant percentage of consumers, estimates at 45%, default on their loans, and the percentage of customers CashCall pursues with collectors is extremely high. In collecting its loans, CashCall makes frequent and repeated harassing telephone calls to a consumer’s residence, place of employment, and/or cellular phone, up to multiple times a day, for days or weeks in a row, demanding payment of outstanding debt. During these phone calls, CashCall uniformly employs aggressive tactics, including abusive tone and language, harassing tone and language, and providing incorrect or misrepresentative information to convince consumers to make payments.
What is the case of De La Torre v. Cashcall?
The original lawsuit, which was filed and litigated by the same attorneys, resulted in a landmark, unanimous decision by the California Supreme Court in August 2018, holding that high interest rates alone could render loans unconscionable under California Law. De La Torre v. CashCall, Inc. (2018) 5 Cal.5 th 966. This decision is especially important because it is the first case to both interpret and explain the California Legislature’s intention to protect targeted, vulnerable Californians from gross overreaching by online consumer lenders like CashCall. Going forward, all such loans—used autos, unsecured small money and other loans—will be subject to judicial scrutiny.
What is the class action lawsuit against Cashcall?
A class action lawsuit has been refiled in San Mateo Superior Court against CashCall, an online lender accused of preying on low-income, vulnerable consumers in California with its $2,600 “signature loan.” The signature loan, which was issued to more than 135,000 low-income borrowers between August 2005 and July 2011, featured interest rates ranging from 96% to 135% for repayment periods of three and a half years and more. The lawsuit, De La Torre v. CashCall, was filed on March 7, 2019 by the Sturdevant Law Firm, the Law Office of Arthur D. Levy, Gibbs Law Group, Rukin Hyland & Riggin and the Law Offices of Damon M. Connolly.
What did Cashcall violate?
Plaintiffs contended that CashCall’s practice violated the federal Electronic Funds Transfer Act and California law.
Where was the case of Eduardo de la Torre dismissed?
On March 7, 2019, Plaintiff Eduardo De La Torre refiled the case in California Superior Court, County of San Mateo.
What is the responsibility of courts in consumer loans?
Courts have a responsibility to guard against consumer loan provisions with unduly oppressive terms.
What is the unanimous ruling in California?
The unanimous ruling is a major victory for consumers and is expected to have a significant impact on the consumer lending market in California, particularly high-interest lending to “subprime” borrowers with low credit scores.
What court did the California Supreme Court appeal the summary judgment decision?
Along with co-counsel, our firm appealed the district court ’s summary judgment decision to the Ninth Circuit Court of Appeals. The Ninth Circuit asked the California Supreme Court to determine whether interest rates for loans over $2,500 could be deemed unconscionable under California’s Financial Code.
What does "unconscionable" mean in California?
The lawsuit alleges that such loans are “unconscionable” under California law, meaning that they are “unreasonably and unexpectedly harsh,” “unduly oppressive,” or “so one-sided as to shock the conscience.”.
When was the NSF settlement approved?
The district judge granted final approval of the settlement on November 17, 2017. Class members who actually paid non-sufficient funds (NSF) fees before any cancellation of their initial EFT authorizations received a proportional allocation of the $830,000 settlement fund.
Introduction
A. Factual Allegations1
- In February 2006, De La Torre borrowed $2,600 from Defendant CashCall, Inc. ("CashCall") based on an annual percentage rate of interest ("APR") of approximately 98%. Fourth Am. Compl. ("FAC") ¶ 24, Dkt. No. 54. In May 2006, Kempley2 borrowed $2,525 from CashCall based on an APR of 99.07%. Id. ¶ 28. Neither De La Torre nor Kempley could afford their...
B. Procedural Background
- On July 1, 2008, Plaintiffs initiated this action on behalf of themselves and similarly situated individuals. See Compl., Dkt. No. 1. On February 25, 2010, they filed the operative FAC. See FAC. The FAC asserts a total of six claims. It asserts three claims for violations of (1) the Electronic Fund Transfer Act ("EFTA"), 15 U.S.C. § 1693; (2) the California Consumer Legal Remedies Act ("…
Class Certification, Summary Judgment, and Appeal
- On November 15, 2011, the Court certified two classes. Class Cert. Order, Dkt. No. 100. It certified a Conditioning Class, which was later limited to "[a]ll individuals who, while residing in California, borrowed money from CashCall, Inc. for personal, family, or household use on or after March 13, 2006 through July 10, 2011 and were charged an [nonsufficient fund (2017NSF')] fee." Order App…
Bench Trial
- The Court held a bench trial on September 8 and 9, 2015 on the issue of whether Plaintiffs are entitled to statutory and/or actual damages under the EFTA and/or restitution under the UCL. See Sept. 8, 2015 Trial Tr., Dkt. No. 296; Sept. 9, 2015 Trial Tr., Dkt. No. 298. On March 16, 2016, the Court issued its Findings of Fact and Conclusions of Law. Findings of Fact & Conclusions of La…
Post-Trial Motions
- CashCall moved to amend the FFCL and enter judgment in its favor pursuant to Rule 59(a)(2), on the ground that Spokeo made it clear that Kempley lacked standing to pursue damages under the EFTA on both her own behalf and on behalf of the Class. CashCall Rule 59 Mot. at 1, Dkt. No. 326. Plaintiffs opposed CashCall's Rule 59 Motion and affirmatively moved under Rule 59, or alternati…
Settlement Negotiations
- In the meantime, the parties returned to settlement negotiations. Dkt. Nos. 347, 350. On March 10, 2017, they reached a settlement as to the Conditioning Claim. Dkt. No. 350. The Court accordingly vacated the evidentiary hearing and set a briefing schedule for Plaintiffs to file the instant motion. Dkt. No. 356.
A. The Settlement Class
- The Settlement provides relief for the Conditioning Class, defined as "all individuals who, while residing in California, borrowed money from CashCall for personal, family, or household use from March 13, 2006 through July 10, 2011 and were charged an NSF fee." Settlement ¶ 1.5.
B. Remedies
- Under the terms of the Settlement, CashCall shall pay a maximum of $1.5 million (the "Settlement Fund"). The Settlement allocates $830,000 of the Settlement Fund to Class Members who paid NSF fees prior to the cancellation, if any, of their respective authorizations to collect loan payments via EFT. Settlement ¶ 3.1. Class Members will receive a pro rata share of the $830,00…
C. Distribution of Funds
- The Settlement Administrator shall mail Class Members payment in the form of a check. Id. ¶ 3.1. Class Members shall have sixty days from the date of mailing to cash their payments. Id.¶ 4.13. CashCall will provide the Settlement Administrator with, among other things, Class Members' contact information, including their last known mailing and email addresses. Id. ¶ 4.3. The Settle…