CHARLESTON – The West Virginia Supreme Court of Appeals has affirmed three circuit court rulings that would force a California Internet lender to pay $15 million to state consumers.

On May 30, the Court issued a memorandum decision after CashCall Inc. and President and CEO J. Paul Reddam had appealed the Kanawha Circuit Court rulings.

In 2008, former Attorney General Darrell McGraw sued CashCall for allegedly pushing predatory loans with interest rates of up to 99 percent APR on consumers. When West Virginia consumers defaulted, CashCall engaged in collection abuse and harassed and threatened consumers, McGraw claimed.

McGraw’s office alleged that CashCall entered into a “sham” relationship with First Bank & Trust of Milbank, S.D., for the purpose of using the bank’s charter to evade the State’s usury laws. McGraw claimed that although the loans obtained by West Virginia consumers were made to appear as if they were issued by the South Dakota bank, CashCall was actually the true lender because it bore the entire economic risk of the loans.

After CashCall attempted to remove the case to federal court, the state had it remanded back to Kanawha County. The trial took place in 2011, and Circuit Judge Duke Bloom entered orders in 2012 and 2013 ordering CashCall to pay $15 million in civil penalties, refunds and canceled debts to 292 West Virginia consumers.

CashCall was granted a motion to stay the proceedings upon posting a $13.8 million bond.

The May 30 decision also overruled CashCall’s assertion that attorney fees award to the state Attorney General’s office in the matter were incorrect.

Barring any further appeal, CashCall now should start paying the money to the state and consumers.

Doug Davis and Norman Googel led the work of current Attorney General Patrick Morrisey's office in the appeal of the case, while CashCall and Reddam were represented by Charles L. Woody and Bruce M. Jacobs.

West Virginia Supreme Court of Appeals case number: 12-1274 (Kanawha Circuit Court case number: 08-C-1964)

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