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 Message Boards » » Couple opens a 59% loan Page [1]  
ShinAntonio
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"East Knox couple claims Internet loan company misled them, hid terms

By Rebecca Williams
Monday, April 20, 2009

The Brown family of East Knoxville has learned the hard way that there's no such thing as easy money.

"We needed to come up with more money to make more room, add to the house," says Kay Brown, who in October 2006 wanted to take out a loan of $2,000 to enlarge the small home she lives in with her husband, Lewis Brown, adult son, Daniel Collins, and their 15-month-old grandson, Isaiah, in East Knoxville.

Rather than going to a bank, Brown thought it would be easier to get a loan through CashCall, a company she saw on television. "My husband didn't mind to get it, but he didn't want to run all over everywhere. It was a convenience thing," she says.

Brown called CashCall in October 2006 and asked them to send her an application. However, the salesperson said she would need to apply through the Internet. Neither Brown nor Collins knew how to use a computer.

"I don't know how to operate one, because I can't read or spell," says Brown.

The salesperson at CashCall said Brown could ask a friend to help. So she called her nephew, Johnny Lane of Grainger County.

Brown says the company talked her and Lane through what she thought was just an application process. However, Lane entered Lewis Brown's Social Security and bank account numbers on CashCall's Web site. Then, he unknowingly clicked the buttons to "sign" the loan electronically.

It was the beginning of what is now a two-year legal and financial nightmare.

First, CashCall sent the Browns more money than they asked for - $5,000 instead of $2,000 - directly to their bank account. CashCall told her later they require loans of $5,000 or more.

Next, the Internet application allegedly contained a promissory note (a promise to pay back the loan) at 59 percent interest over 82 months. That's $254.03 per month, for a total of $20,830.

"There's no way they would have accepted that loan with those terms," says Collins.

Brown says the company never sent paperwork explaining the terms of the loan. "I ain't got no knowledge of spelling and writing, but the Lord gave me a good memory," Brown says. "And I know they never said anything about 59 percent interest."

Brown has made the payments faithfully so far, for a total of more than $5,000. Last fall she tried to get the payments reduced or pay off the loan. She still had not received a loan statement and was shocked at how much they said she owed - more than $15,000.

"They said, 'You took the loan, now you pay the loan back.' And that's just how nasty they said it, too,'" says Brown.

Tennessee, like most states, has limits on the amount of interest a lender can charge. Currently it's 7.25 percent, but it can't be higher than 24 percent, according to the Tennessee Department of Financial Institutions.

So how could CashCall charge so much interest?

"They've attempted to circumvent Tennessee law," says Doug Rose, an attorney with the law firm of Stone and Hinds, which has filed a lawsuit on Brown's behalf in the General Sessions Court for Knox County. They are also trying to get the state's attorney general to look into criminal charges. Rose says the state of West Virginia recently has filed suit against CashCall for its predatory lending practices.

Rose says CashCall used First Bank & Trust of Milbank, S.D., as a "straw man lender," because South Dakota has no limits on interest rates on amounts of more than $5,000. While CashCall did all the marketing for the loan, First Bank & Trust actually issued it under South Dakota law and then transferred it three days later to CashCall.

Brown says she had no idea she wasn't dealing with a legitimate Tennessee bank until after the loan was in place. "I feel like I've been robbed," she says.

The News Sentinel called CashCall for a comment, but a spokesperson who gave only her first name refused, saying, "Our company policy is not to comment on any pending litigation."

The outcome of her case is uncertain, but Brown has a simple bit of advice for others looking for a quick loan.

"Don't go online for anything, because it's not going to work out," Brown says. "If you want to borrow money, go to someone to sit down and sign the papers. I don't want to see another family taken advantage of."

Rebecca Williams is a freelance contributor to the News Sentinel."


http://www.knoxnews.com/news/2009/apr/20/badly-bitten/

Holy cow.

4/20/2009 11:30:02 PM

aph319
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It's a story for all involved

4/20/2009 11:30:51 PM

fredbot3000
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i thought surely to goodness it was supposed to be 5.9% and there was just a typo or something somewhere

poor illiterate hicks

4/20/2009 11:35:51 PM

Spontaneous
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Quote :
"POOR

ILLITERATE

HICKS"

4/20/2009 11:36:56 PM

JeffreyBSG
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I would be all about flogging the good people at CashCall nearly to death

hell, I'd do it myself

4/20/2009 11:40:48 PM

Rockster
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12ga refinance

4/20/2009 11:46:18 PM

bottombaby
IRL
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just wow. for so many reasons. wow.

4/20/2009 11:51:53 PM

Mr. Joshua
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""Don't go online for anything, because it's not going to work out," Brown says. "If you want to borrow money, go to someone to sit down and sign the papers. I don't want to see another family taken advantage of.""


I hope that all of the other illiterate people without computers in Tennessee read that.

4/21/2009 12:13:54 AM

ncsuapex
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so much fael in that story.

4/21/2009 12:16:05 AM

theDuke866
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Education is expensive, no matter how you get it.

4/21/2009 12:33:39 AM

Jen
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Quote :
""I ain't got no knowledge of spelling and writing, but the Lord gave me a good memory," Brown says. "And I know they never said anything about 59 percent interest."
"


wow on so many levels

4/21/2009 12:37:33 AM

Big Business
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^


I'm Big Business and i approved this message.

4/21/2009 12:44:01 AM

paerabol
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"Education is expensive, no matter how you get it."



qft.

4/21/2009 3:03:45 AM

Phelps
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This is obviously despicable and you would think it would be easy to find a law firm to take this on pro bono.

But I couldn't help but wonder why 59%. Your plan is obviously get them to sign regardless of what the interest rate it. Why not 100% or 200%. It's not like 59% is reasonable but 100% isn't.

4/21/2009 7:31:31 AM

BobbyDigital
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I'm guessing because it's easy to confuse a retard backwoods SEC country hick and make them believe that 59% is 5.9%, which is a pretty standard sounding interest rate.

4/21/2009 7:35:35 AM

JCASHFAN
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"Brown has made the payments faithfully so far, for a total of more than $5,000."
You know, it is easy to make fun of these people, but far more educated people have knowingly made worse decisions and failed to follow through on their obligations . . . hence the current financial situation we're in. These folks made a colossal mistake, but so far they're holding up their end of the bargain.

4/21/2009 7:58:23 AM

jbtilley
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Aren't there usury laws. Do they kick in at 60% or something?

4/21/2009 8:01:29 AM

JCASHFAN
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Read the article. The loan was originated in South Dakota which has no such laws.

4/21/2009 8:01:57 AM

jbtilley
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Oh, I see it now:

Quote :
"Rose says CashCall used First Bank & Trust of Milbank, S.D., as a "straw man lender," because South Dakota has no limits on interest rates on amounts of more than $5,000. While CashCall did all the marketing for the loan, First Bank & Trust actually issued it under South Dakota law and then transferred it three days later to CashCall."


Seems backwards. You'd think they would have laws limiting interest rates on anything greater than $5,000 and no limits on anything below that. This also explains why they changed their loan from $2,000 to $5,000. Seems like an open and shut fraud case to me.

Ok, so I looked for their rules:

Quote :
"SOUTH DAKOTA, the legal rate of interest is 15%, judgments bear interest at the rate of 12%. There is no other usury limit. There are certain limitations on consumer loans below $ 5,000.00.
"


No telling what "certain limitations" are.

[Edited on April 21, 2009 at 8:23 AM. Reason : -]

4/21/2009 8:16:31 AM

DROD900
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I'm surprised they were able to afford $254.03 payments every month

4/21/2009 8:21:55 AM

taboo2k
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could have just saved that amount each month for like 9 months and woulda had the 2k hehe

4/21/2009 9:09:10 AM

BobbyDigital
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these people can't even read. I doubt they can comprehend that 9 months of saving their monthly payment would have been more than enough.

on another note, I do give them props for holding up their end of the deal. I hope that company gets fucked, though. it may be legal, but it's still fucked up.

4/21/2009 9:12:03 AM

se7entythree
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Quote :
"Couple opens a 59% loan"


when i first saw this i thought, what is wrong with financing 59% of the total cost of something?

then i saw you meant the interest rate was 59%

yeah, you missed that part in your thread title

4/21/2009 9:14:22 AM

Lavim
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Lets be honest here, it sounds like the company is going to get away with it and these people are the ones who are going to get fucked :/

4/21/2009 9:24:04 AM

schwank
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^they deserve it. herbert spencer ftw!!!!!!!!!!!!!!!!!!!!

4/21/2009 9:35:36 AM

gunzz
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http://www.consumeraffairs.com/finance/cashcall.html

http://www.cashcall.com/General/Rates.aspx

http://www.ripoffreport.com/searchresults.asp?q1=ALL&q4=&q6=&q3=&q2=&q7=&searchtype=0&submit2=Search!&q5=CASH+CALL

IF ANYONE IS A REGULAR AT 4CHAN....GET /B/ ON THIS AND TAKE THESE FAGGOTS DOWN

4/21/2009 9:48:03 AM

mcfluffle
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i want to know why they can´t read >_>

[Edited on April 21, 2009 at 9:48 AM. Reason : ^haha]

4/21/2009 9:48:06 AM

JCASHFAN
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4/21/2009 9:48:18 AM

bobster
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^^George Bush

[Edited on April 21, 2009 at 10:16 AM. Reason : .]

4/21/2009 10:16:03 AM

Mulva
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I wonder if there is some way you could set up a "straw borrower" using some other loophole and really fuck this piece of shit company from the consumer end. Then when they complain just bring up all their underhanded bullshit and say you're just playing the same game

4/21/2009 10:21:28 AM

schwank
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not your personal army guns- unless sometimes

4/21/2009 10:22:41 AM

Arab13
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Quote :
""I don't know how to operate one, because I can't read or spell," says Brown."

4/21/2009 11:32:01 AM

Gzusfrk
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Quote :
"on another note, I do give them props for holding up their end of the deal. I hope that company gets fucked, though. it may be legal, but it's still fucked up."


I'm pretty sure that if they took this to court, the family would win. Even if there aren't any laws to prevent this kind of interest rate, the fact that she's illiterate and filled the thing out online and didn't understand the terms would invalidate it in most cases. There are so many things going on in this story that would be unconscionable. I wouldn't be surprised if they took it to court and got a refund on the money they paid over $2,000.

4/21/2009 11:42:15 AM

s4m
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Quote :
"http://www.consumeraffairs.com/finance/cashcall.html"


God, every post there is like "they clearly explained the terms of the loan, stressing how much I'd have to pay back, and even strongly recommended that I pay it back early to reduce the amount I had to pay back....But now a few years later I have had to pay more interest than the loan was worth and I'm outraged!! This is the worst company ever, the government should save me"

4/21/2009 11:46:06 AM

Kiwi
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ShinAntonio are you in Knoxville dawg?

4/21/2009 12:13:26 PM

BobbyDigital
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I'm thinking unless have a notarized power of attorney for their nephew, the contract is probably not legally binding. I'm also doubtful this would hold up in court.

[Edited on April 21, 2009 at 12:17 PM. Reason : af]

4/21/2009 12:16:59 PM

Fhqwhgads
Fuckwads SS '15
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the next time one of those loan commercials comes on TV, pause the TV and read the fine print


its full of LOLs

4/21/2009 1:05:08 PM

Wolf2Ranger
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yea its BS that this company abuses dumbasses, but people are dumbasses!

IDK what is worse, that people getting screwwed or the fact they are dumb enough to get screwwed

4/21/2009 1:20:30 PM

dagreenone
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Quote :
""I ain't got no knowledge of spelling and writing, but the Lord gave me a good memory," Brown says. "And I know they never said anything about 59 percent interest.""


4/21/2009 1:31:53 PM

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