People scammed by Western Sky loans to get repayments
Michigan consumers who have been scammed by illegal and expensive loans from Western Sky Financial and CashCall are expected to see refund checks by October 2 as part of a multi-million dollar settlement announced earlier.
More than 6,500 Michigan residents have submitted claims to the administrator of the settlement fund. Notices were sent to consumers with potential complaints between June 29 and September 18. The deadline to submit a complaint was September 18.
The state said it was difficult to estimate the repayment amount for each borrower. The amount will reflect, in part, the specific amount the borrower has paid on their loan. The claim amount of $ 2.2 million for refunds would be divided equally, on a percentage basis, between all claims filed.
Due to the high fees and rates, the state said earlier that a consumer who borrowed $ 1,000 from Western Sky would have had to repay more than $ 4,000 over the two-year term of the loan.
Michigan Attorney General Bill Schuette and Michigan Department of Insurance and Financial Services Director Patrick McPharlin announced final details of the claim this week.
The relief available under the settlement includes a repayment, reduction of a borrower’s loan balance, or a complete write-off of the outstanding loan balance.
The total dollar value of canceled loan balances was $ 15.72 million. The total value of amended or reduced loan balances was $ 6.85 million. The total reimbursement amount will be $ 2.2 million.
Borrowers who have received a notice should watch their mail for their repayment check. But borrowers are also warned of possible scams and reminded, once again, that they don’t need to pay anyone or take other steps to receive a refund.
“The legislature has passed interest rate limits on various types of loans to protect Michigan consumers, and we will not tolerate attempts to circumvent these laws and exploit our citizens,” Schuette said in a statement.
State regulators noted that Western Sky loans had interest rates of up to 169%.
Two years ago, the Department of Insurance and Financial Services decided to block Western Sky from granting unlicensed, high-interest loans to Michigan consumers. After negotiations, Western Sky terminated any new loan in Michigan in September 2013.
A woman from Lansing told me in 2013 that she fell for one of these Western Sky loans shortly after seeing a TV commercial for the lender online. She wanted the loans to pay off two more payday loans, but found out that she owed $ 11,412.12 over four years in interest just after receiving $ 2,525 in credit.
If you have filed a claim and have questions about your repayment check, loan modification or cancellation, or other matters, contact the settlement number for Western Sky and CashCall at 866-336-5756 or visit the Settlement website at www.MIWesternSkySettlement.com.
If you have a complaint about another lender or loan, contact the Michigan Department of Insurance and Financial Services at 877-999-6442 or visit the DIFS website at www.michigan.gov/difs.
Contact Susan Tompor: 313-222-8876 or [email protected] Follow her on Twitter @Tompor.