Legal Question in Credit and Debt Law in California

About 6 months ago my wife took out a loan with Call Cash for $2600 she was only asking for a $1000 so she could get a car payment caught up. The rep she spoke to at Cash Call. Told her by law Cash Call could only give out loans of $2600 dollars or more even though she only needed a $1000 and once she receive the money she could give all the money back to Cash Call except the $1000 she need and her payments would be adjusted. I found out later this not to be true from the Department of Corporations who told me that Cash Call tries to convince people to take out the $2600 loan which has no cap on the interest rate that any loan less than $2500 has a rate cap under usury laws if the loan had only been $1000 the interest rate she was being charged would have been much less
The other issue is Cash Call requires a person to have an active checking account in their name in order to receive the funds, my wife didn't have one and gave them my banking info, she is not on that account and has never been and has no legal right or control over that account
I found out about the loan when I realize Cash Call had taking money out of my account without my permission. I called the bank and blocked Cash Call
from pulling money out.
They have been sending her letters and phone calls ask her to pay the money back their interest rate is something like 300 percent and the payments are over $400 a month I explain to them that she never received the money it went into my account and she has no control over it Am I legally obligated to pay them back the money with interest since it went into account that she has no control over and since she never received the money can they make her pay it back the mistake was theirs they did not verify the account was not hers I never agreed to this loan she did it without my knowledge and now they're threatening to sue

Asked on 7/21/14, 2:03 pm

2 Answers from Attorneys

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1. Even if they did something illegal, that doesn't mean you get to keep money and not pay it back. The money went into your account, you owe it back.

2. Welcome to the flip side of community property law - it's not just about divorce, so:

2.a. Unless that bank account was set up before you were married, OR it was set up after marriage to receive the proceeds of sale of assets entirely acquired before marriage, OR was set up after marriage to receive other separate property funds, such as an inheritance, AND it never has had any money earned during the marriage put into it, it is community property; and

2.b. The debt is a community debt owed by both of you because it was taken out during the marriage.

So, you are probably entitled to the lower interest rate, and you should definitely file a complaint with the state for their practices (if you have proof, which you probably don't, of what your wife was told on the phone), but you definitely owe the money back, with whatever legal interest they are entitled to charge.

Answered on 7/21/14, 2:19 pm

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