I am absolutely fascinated by Cash Call.

You've probably seen the TV ads for Cash Call starring Gary Coleman of "Whatchu talkin' 'bout Willis?" fame. They have got to be just about the most interesting company currently in the personal loan business.

For starters, their rates are absolutely obscene. I have no idea how they get around usury laws. Here are their current rates as of 7/11/2007 for the state of California.

If you can't read that, here are the worst - starting from the bottom up.

$2,600 loan @ 99.25% interest - 42 payments of $216.55
- Total of payments = $9,095.10, total interest paid = $6,495.10
- Time to recoup original loan amount = 12.01 months

$5,000 loan @ 59.95% interest - 84 payments of $254.03
- Total of payments = $21,338.52, total interest paid = $16,338.52
- Time to recoup original loan amount = 19.78 months

$10,000 loan @ 44.38% interest - 120 payments of $371.60
- Total of payments = $44,592.00, total interest paid = $34,592.00
- Time to recoup original loan amount = 26.91 months

Did I mention there is also a $75 fee for each loan?

With a little bit of research, I found a SFGate article about the origins of Cash Call from September 22, 2004.

"And, Reddam acknowledged, about 20 percent of CashCall customers to date have defaulted on their loans. "We're in a new area and we're learning all the time," he said, adding that he hopes CashCall will be profitable by the end of next year.

This isn't Reddam's first brush with consumer financing. He also founded the mortgage firm DiTech (the one with the really annoying TV ads), which was purchased in 1999 by General Motors Acceptance Corp. Reddam, 49, resigned from DiTech in 2000. He said the idea for CashCall came from his experience providing second mortgages at DiTech. He became aware that even relatively prosperous people can easily, and frequently, live beyond their means. "People tend to spend as fast as they make money," Reddam said. "Whatever they make, they spend. There's a live-for-today mentality. "It's quite shocking, really.""

A 20 percent default rate isn't really surprising, considering the interest rate and the foolishness of the people who fall for these types of loans. I'd live in a cardboard box and eat garbarge before I'd sign up for a loan at 99.25% interest. It would be very interesting to find out what their current default rate is - but I can't find much in the way of information.

Now what sets CashCall apart from other banks is their collection tactics. I believe they start by looking for ideal customers - have a job, have a checking account, not too smart with money. Then they run a credit check to see how much risk the customer has - late payments, outstanding debt, etc. Based on that information, they make a small loan.

Then they immediately start with strong arm collection tactics. Read some of the hilarity over at rip off report.com. As long as you keep the checking account open, they can just take the money right out of it. It's rather brilliant, really. No waiting for people to make payments. When you don't pay, they go right for the throat - threats, intimidation, lawsuits, garnishing wages, calling your friends, etc. And best of all - they DON'T NEGOTIATE. Default on a credit card - they'll let it go for 80% of the balance, sometimes much less. But default on CashCall, and they won't play ball at all.

Whatever they are doing, it's working. They are making bundles of cash. Their ads are constantly on TV. They sponsor all sorts of events in SoCal. Here's to you, Gary Coleman. Back from the dead AND you got a free $10,000. Awesome.