The Sacramento Bee wrote about my lawsuit against Cash Call on November 12, 2007. I will reprint part of it here:
Matter of interest: It’s legal for a state-licensed finance agency to make a loan with a 59.9 percent interest rate. But is it “conscionable”?
Not according to Elk Grove attorney Jonathan G. Stein, who has just filed a lawsuit against CashCall Inc. of Fountain Valley.
CashCall made a $5,000 loan to Sacramentan Trina Enos with an interest rate that will require her to repay more than $30,000 over the term of the loan, according to the suit.
That’s just not right, says Stein. He contends the law prohibits even “legal” contracts when they are too one-sided.
“When something is so outlandish, the courts can step in and void the contract,” he says.
The lawsuit, filed Oct. 29 in Sacramento Superior Court, also alleges that CashCall illegally harassed Enos when she fell behind on her payments.
Stein says he believes it’s the first lawsuit of its kind against CashCall. Why aren’t there more?
“Quite frankly,” he says, “the people who take out these kinds of loans don’t have the money to pay for attorneys.”
A CashCall spokesman didn’t return our calls for comment. But McGeorge School of Law contracts prof and former dean Gerald Caplan suspects the company’s execs aren’t losing much sleep over the filing.
“It sounds not only novel,” he says of the suit’s allegation of unconscionable rates, “but a difficult argument to prevail on.”
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With all due respect to Prof. Caplan, I don’t believe he has read the lawsuit or done the research on the case. However, I will keep you updated on this – and on whether I get to meet Gary Coleman!