May 2012

Western Sky Scam is More than Just Usury

Western Sky Financial has been one of the most prominent and most successful lenders over the past couple of years. Desperate consumers continue to flock to the high-interest lender to obtain loans that they believe will somehow alleviate their financial situation.

Skeptical consumers often ask, “is Western Sky Financial legal?” Of course they are referring to the usurious interest rates charged that often exceed state usury limits where the consumer lives. While the rate itself is often actually illegal, what is really interesting is the illegal steps taken by the lender to obtain a judgment against those who fail to repay the nearly impossible to repay loans.

Forget about the fact that their advertisement claims “No cost to apply” even though a $75 loan origination fee is clearly revealed on the same page. Forget about the usurious interest rates charged by the lender that can run anywhere from 116.73% to 194.7% APR even though many states limit such rates to 35% APR.

None of these facts seem to count since Western Sky Financial, LLC claims it is only bound by the laws of the Cheyenne River Sioux Reservation. As a business based in the sovereign Native American reservation, Western Sky claims that it is not bound by Federal United States law. Maryland and Colorado are among several states to sue Western Sky Financial for violating state usury laws.

That is their basis for violating state usury limits. They claim they are not bound by the laws in those states and therefore may continue to provide the “illegal” loans so long as they are legal in the Cheyenne River Sioux Reservation. It is this assertion that is the basis for the defense of those who fail to repay the loans.

When you default on a Western Sky loan, Western Sky Financial will pursue normal collection activities and ultimately file for a judgment against you in the Cheyenne River Sioux Tribal Court. There is just one simple problem with this approach. The Cheyenne River Sioux Tribal Court has no jurisdiction over a non-tribal borrower living in South Carolina, California or any other location outside the reservation.

This problem was confirmed when the Federal Trade Commission sued Western Sky Financial for illegal garnishments. The FTC complaint asserted that Western Sky Financial scammed its customers through violations of the FTC Act. Furthermore, it claimed the Cheyenne River Sioux Tribal Court had no jurisdiction over non-member loans and therefore the judgments and subsequent wage garnishments were illegal.

In case you are asking how Western Sky Financial is legal, the answer is it is absolutely legal. Western Sky may charge whatever it wants and pursue legal action against any member of the Cheyenne River Sioux Tribe through the tribal court. Of course you may recognize that the vast majority of its loans are outside of the Cheyenne River Sioux Tribe, made to non-members who reside outside of the reservation. On that note, we can easily declare that Western Sky Financial’s activities are absolutely a scam.

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10 Responses

  1. David says:

    They further these efforts to bypass the law by now using Cashcall a California lending company.
    quickly the loan is handed to cashcall. BTW who has been sued for their lending practices as well.

    so no if you don’t pay cashcall and their collection company Delbert Service will be on your heels…what is a person to do…as many think the loan is governed by tribal law…is it or is it not.now that cashcall is involved

    Just saying….very confusing the whole affair

  2. John says:

    CashCall is just a servicer of the loan. The loan agreement states that it is still bound under the tribe reservation. So in essence, CashCall doesn’t have a leg to stand on.

  3. bree says:

    what is one to do? When Westernsky/Cashcall/& now I have Delbert Service to deal with. I paid the principle, but they are saying they want the high interest to, they are on my credit report, I have written to the Credit Reporting Agency’s, no help from them. They get paid to give people bad credit scores. I cant take them to court, cant afford the lawyer. What if anything will work? I want them off my credit report. & can Delbert Services garnish my wages? Will they have to at least god I hope have to take me to court? I can not see a Judge in Iowa letting them do this, or will they? Any help I would really appreciate.
    Thank you!

  4. Michelle says:

    I had given Western Sky a call but had gotten a Cash Call representative who states I was approved for $2,500.00. What was deposited was $2,425.00 with $75.00 fee. In the email from Western Sky, they claim they transferred $2,600.00 to Cash Call. I made payments then have seen several websites regarding scams. I had called a representative at Cash Call who states my loan balance is $3,325.00. That sounds suspicious considering I only received $2,425.00.

  5. Kenneth Long says:

    Dear Michelle,

    You have accurately explained what a horrible deal the Western Sky loan is. I recommend contacting the attorney general for your state to see if the loan is legal. If it is, you need to talk to your local credit union for a loan or sell something today to pay the loan off immediately. Otherwise, only Donald Trump earns money fast enough to afford that type of interest payment.

  6. heather says:

    I have only been dealing with them for a lil Bhutan payment only 15 days later which I scheduled o.line with cash call and now Delbert fincial is contacting me

  7. Jane Doe says:

    I won’t use my real name here but what I will say is Western Sky, Cash Call and Delbert Services are worse leg breakers than the maffia. My loan is 10x usury at 136% interest. DO NOT TAKE ANY LOANS WITH THESE SCUMBAGS – MULTIPLE STATES ATTORNEY GENERALS ARE GOING AFTER THESE PEOPLE FOR JUST THIS REASON. THEY ARE BLOOD SUCKERS.

  8. CJ says:

    Regrettably, I fell into their trap. I just sent this out today along with a letter to the FTC and advised Delbert.

    New Jersey Office of the Attorney General
    New Jersey Division of Consumer Affairs
    Eric T. Kanefsky, Director
    PO Box 45027
    Newark, NJ 07101

    Dear Mr. Kanefsky,

    My name is ——- and I am writing you today as I believe I have been the victim of usury interest. On April 18, 2013, in some financial desperation, I regrettably took out a $10,000 loan with a company called Western Sky Financial. I had taken a loan out with the same company once before for the same amount and repaid it within a month. Western Sky financial immediately funded and then sold the loan to a company called Cash Call. Shortly thereafter the loan was sold to Delbert Services. I was contacted by Delbert Services in early October, 2013; they demanded that a sign a new ACH withdraw form in order for them to debit my checking account for future payments. As of that date, I had not missed a payment. The demeanor of the representative on the phone from Delbert Services was demanding, harsh and persistent. I did not sign a new ACH form and advised them not to contact me telephonically again.

    I am in receipt of a letter from Delbert Services (attached EX. 1-7) dated October 7, 2013 indicating that I disputed this debt which is not the case. Upon receipt of this letter I began to do some research. First I learned that Western Sky had been shut down. Then I learned that although Western Sky Claims to be operating under the laws of the Cheyenne Indian Reservation in South Dakota that in all actuality they have addresses in California and Nevada. I further learned that Western Sky, Cash Call and Delbert Services are all owned by the same individual, John Paul Reddam. As my research continued, I learned that several States Attorney Generals have sued all three above named companies based on illegal operation. Cease and desist orders against them have been issued based on to include but not limited to usury interest and illegal operation in the prospective State and some States have declared the loans null and void (Example Massachusetts). I also know that the FTC is investigating the companies and Reddam.

    Attached to this letter, in Exhibit 1-7 includes the “Truth and Lending” statement charging me almost 90% interest. I would respectfully request that you look in to this matter as my research has also revealed that I am not the only New Jersey Resident that has fallen into this trap. Yes, at the time, I was in a situation and needed the loan but after realizing that these companies may be committing illegal acts violating both State and Federal Laws, which I abide by, I see it necessary to request your assistance.

    Thank you,


    cc. Federal Trade Commission

  9. CJ says:

    I just did some more in depth research and the NJ Div of Banking is working with the NJ AG’s office to follow what so many other states have already done. Glad I sent those letters out.

  10. brad roberds says:

    I fell into it too. The Arkansas Attorney General is sueing all of those companies, also. You can sens a cease and desist letter to keep them from calling, you, your family or any of your employers, according to FEDERAL law. That way, they can ONLY contact you through mail.You can look up the federal fair debt collection act online and also look up examples of the cease and desist letters to send. There really isn’t anything they can do, beyond harassment, and, when you send the letters certified and take away the ability to call, they don’t have much else they can do.

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