SAN FRANCISCO--(BUSINESS WIRE)--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.
The newly-filed complaint alleges that CashCall’s $2,600 loans are unconscionable because of the combination of loan interest rate, length of the loan repayment schedule, and the amount of monthly payments. In order to repay such a loan, a borrower had to pay 3.6 to 4.3 times the principal amount over the life of the loan, amounting to more than $9,184 for a $2,525 loan at 96% and $10,918 at 135%. CashCall is alleged to have collected hundreds of millions of dollars in interest payments from borrowers on loans made during the class period, despite its known 45% default rate.
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.5th 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.
“This is a huge, overdue victory for thousands of low-income Californians who have been targeted by lenders like CashCall,” said Jim Sturdevant, one of the lead attorneys who argued the case before the high Court.
“We look forward to continuing to advocate for those borrowers through our lawsuit, and we intend to hold CashCall accountable for the harm it caused so many people with its predatory products,” added Steven Tindall of Gibbs Law Group.
Consumers who were affected or would like to learn more about their legal rights in the CashCall lawsuit may visit https://www.classlawgroup.com/cashcall-consumer-loans-lawsuit/ or contact Jim Sturdevant at (415) 477-2410 or Steven Tindall at (510) 350-9700.