New York consumers who paid exorbitant interest rates to the online lender Western Sky and the online loan servicer CashCall can begin filing claims to collect refunds.
New York Attorney General Eric Schneiderman said Tuesday that more than $20 million is available to New York residents who took out loans from the now-defunct Western Sky and paid it or CashCall, its Anaheim, Calif.-based servicer, more than the proceeds of the loan plus the legal interest rate of 16%.
To receive a refund, eligible borrowers must submit a claim to the settlement fund administrator, Feinberg Rozen LLP, by Aug. 5. All borrowers eligible to obtain a refund were sent claim forms last month.
The amount of each borrower's refund depends upon how much illegal interest they paid Western Sky, CashCall, or a party collecting on their behalf. But many eligible borrowers will receive a refund of more than $1,000, Schneiderman said in a press release.
The companies reached a $1.5 settlement with Schneiderman in January after the attorney general filed a lawsuit last summer against the companies and their owners. As part of this settlement, many borrowers have already received loan modifications and credit history adjustments. Western Sky, which had been based in South Dakota, suspended its operations last fall after many banks cut ties with the lender in response to government crackdowns.
"In these tough economic times, my office will continue to pursue all avenues for consumers and seek justice against anyone who defrauds them," Schneiderman said in the release.