(WWBT) - Virginia Attorney General Mark Herring announced that a lending company will be forced to refund millions of dollars back to Virginians.
Thousands of Virginian may be owed millions of dollars because of a settlement between an online loan company called CashCall and the Attorney General's office. The victims were allegedly targets of exceedingly high interest rates that were illegal in this state.
The rates were as high as 230 percent, according to a press release, for loans ranging from $700 to $10,000.
"Maybe you have bill collectors calling you, or maybe you have a sick kid, or you have a car with a transmission that's broken and it forces you to look for any easy way out," says Tom Gallagher with the Central Virginia BBB.
Gallagher says his office is please that the Commonwealth is taking action against the company. CashCall is not accredited with the BBB.
So how did CashCall almost get away with it? According to the AG's office, CashCall took part in a scheme called "rent a tribe." That's where CashCall claimed to be affiliated with a Native American company called Western Sky Financial.
The AG says CashCall deceived consumers into believing no state or federal laws applied to its loans because of protections surrounding Native American businesses.
"We have protections that are built in, in Virginia and in a number of other states," says Gallagher.
Those protections include a cap on interest rates at 12 percent annually.
Gallagher says online loans are appealing to more people because it's easy to apply. But he warns the buyer must be aware.
"Make sure you know who the company is," says Gallagher. "Make sure you know what their business reputation is. Go to the Better Business Bureau, do a search on Google. See what people have to say about them before you enter in any kind of contract with them."
For additional information on the settlement or to file a complaint about a consumer protection matter, please contact Attorney General Herring's Consumer Protection Section:
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