This week, the Consumer Financial Protection (CFPB) took its first action against an online servicer, alleging in a complaint that California-based CashCall, its subsidiary, WS Funding LLC, and its affiliate, Delbert Services Corporation, a Nevada collection agency (all under the common ownership of J. Paul Reddam) violated the bureau's prohibitions on unfair, deceptive and abusive acts and practices. Beginning in late 2009, "CashCall and WS Funding entered into an arrangement with Western Sky Financial, a South Dakota-based online lender" that "asserted state laws did not apply to its business because it was based on an Indian reservation and owned by a member of the Cheyenne River Sioux Tribe." Although investigations and court actions by several states pushed Western Sky to shut down its operations in September 2013, CashCall and Delbert continued withdrawing monthly installments from consumers' bank accounts. The CFPB alleges that under statutes in at least eight of the states in which Western Sky had violated either licensing requirements, interest rate caps or both, "any obligation to pay such loans was rendered void or otherwise nullified in whole or in part by law." The bureau is seeking to have all money refunded, and is also seeking additional damages and civil penalties. For more, read the full news release and complaint.