The suit, filed in Fulton County, asks that the companies’ loans in Georgia be voided and that the firms be forced to pay a penalty equal to three times the interest or other charges levied to Georgia borrowers. A spokeswoman for Olens could not immediately say how many Georgians have been affected.
Western Sky, based in South Dakota, and CashCall are not licensed to loan money in Georgia yet continue to offer the high-interest loans in the state, Olens said.
Olens said Western Sky Financial funds the loans while CashCall services the loans and manages collection of payment. Then-Attorney General Thurbert Baker first contacted Western Sky’s attorney in 2010 based on a complaint about illegal payday lending. The company’s lawyer, Cheryl F. Laurenz-Bogue, responded that because the company is based on the Cheyenne River Indian Reservation and is owned by a Cheyenne Sioux tribal member, it is not subject to Georgia law.
Olens’ office, however, said courts have ruled against tribal immunity arguments in other cases.
By May 2012, Olens said, the company had agreed to stop offering loans in Georgia, an agreement Olens trumpeted to the media. But the company has continued to solicit customers in Georgia and stopped communicating with his office, Olens said.
A copy of Western Sky’s home page dated July 3, included in the lawsuit, has a list of states where the loans are not available. Georgia is not among them.
But Georgia was included in the prohibited states on the company’s home page on Monday. Yet, it continues to have another website specifically soliciting business from Georgians. That site features the Georgia flag and says state residents can apply for cash loans of $1,500 to $10,000.
Elena Parent, executive director of the consumer advocacy group Georgia Watch, said her organization regularly helps people who have taken out loans from Western Sky. Some of those affected signed up for the loans after Western Sky promised to stop offering them here.
One consumer had taken out a $5,000 loan with an APR of 116 percent, Parent said. The woman had already paid $2,000 and still owed more than $5,000.
“If she paid it through the life of the loan, she would pay over $42,000 over seven years,” Parent said.