Washington joins four other states, FTC charging South Dakota-based online payday lender with fraud

Washington has become at least the fifth state to charge a South Dakota-based online payday lender of making unlicensed loans and billing customers for interest rates approaching 2,000 percent. At the federal level, Federal Trade Commission has accused South Dakotan Martin Webb and his Western Sky Financial of violating the Credit Practices Rule, which prohibits unfair and deceptive credit practices and the Electronic Fund Transfer Act. Washington State’s Department of Financial Institutions Consumer Services Division alleged on Thursday that Webb and Western Sky have made thousands of illegal loans. Even if Webb’s businesses had been licensed, the agency said their maximum interest rate of 1,825 percent would have far exceeded the state’s usury limit of 12 percent or 25 percent, depending on the registration of the lender. In an administrative enforcement filing, the agency said it intends to order the lending operations to stop making loans in the state and to reimburse all fees