Western Sky Financial and its affiliates “scam New Yorkers out of millions of dollars,” New York Attorney General Eric Schneiderman has alleged.
The online lender charges interest rates ”so high that a borrower could eventually shell out more than $4,900 to repay a $1,000 loan,” Reuters wrote after obtaining a copy of a lawsuit filed by the AG against the company. The company’s rates are as high as 355 percent and it has made 18,000 loans of up to nearly $10,000 since 2010, according to the lawsuit.
New York isn’t the first state to sue South Dakota-based Western Sky Financial, which claims ties to the Cheyenne River Sioux Tribe. The Better Business Bureau notes that Colorado and the Federal Trade Commission have also sued. BBB gives it an “F” rating based on 100 complaints against it, including 77 that the company did not respond to and seven more that are unresolved.
If the company’s Native American ties are valid, the company may have immunity from state and federal law. Its attorney claims it does, Reuters says. But New York says the company is just a cover — the lender in name only. Instead, companies called CashCall and WS Funding LLC offer and arrange the loans, the state says.
The Federal Trade Commission’s lawsuit is against a host of companies — including such creative names as Big $ky Cash, Great $ky Cash and GSky — all of which have ties to Martin Webb, the owner of Western Sky, the suit says.
The FTC suit claims one of the companies, Payday Financial, sues customers who fall behind on payments in the Cheyenne River Sioux Tribal Court, attempting to obtain a tribal court order to garnish their wages.
“The tribal court does not have jurisdiction over claims against people who do not belong to the Cheyenne River Sioux Tribe and who do not reside on the reservation or elsewhere in South Dakota,” the FTC says.
This article was originally published on MoneyTalksNews.com as 'New York Sues Lender Charging 355 Percent Interest'.