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Local payday lenders must refund illegal loan charges
Two over-charging payday loan stores in Campbell River have been ordered to reimburse cash-strapped borrowers who paid too much for their loans between 2009 and 2012.
The Cash Store on Shoppers Row and Instaloans in Georgia Quay on the Island Highway have been ordered to pay back an estimated $20,000 in excessive illegal charges for payday loans and debit cards.
The stores, both owned by Edmonton-based Cash Store Financial Inc., are responsible for 67 per cent of the payday loan trade here and are two of 100 stores across B.C. that have been ordered repay $1 million to customers. Back in March, Consumer Protection BC, which licences and regulates payday stores, ordered Cash Store Financial to stop charging illegal fees and repay customers who were overcharged. The company ignored a voluntary compliance order, says Manjit Bains, the Vice President of Corporate Relations at Consumer Protection BC. A Supplemental Compliance Order was issued Nov. 30 and the refund process was scheduled to begin on Tuesday.
Bains says the refund process will be overseen by an independent auditor and Consumer Protection BC and she expects all illegally-charged funds could begin to be refunded as soon as February 2013.
“We anticipate that consumers who borrowed more than 68,000 payday loans between Nov. 1, 2009 and March 23, 2012 are eligible for refunds. Consumers have waited long enough for their money.”
Just before hanging up the phone, Vanessa Knight, manager of the Campbell River Cash Store, said: “I have absolutely no comment.” Cash Store Financial CEO Gordon Reykdal did not respond to telephone messages or emails.
Bains says in 2009 regulations came into force that made it illegal to charge more than $23 per $100 loan. It also became illegal to charge for cash cards that clients use as loan debit cards. The average loan is about $450 and is usually repaid in two weeks. The Cash Store and Instaloans were illegally charging between $7 and $18 too much for each and every payday loan.
Consumer Protection BC will ensure that Cash Store Financial provides all eligible consumers with refunds. Any funds that remain unclaimed after all efforts to reach customers are exhausted will be held by Consumer Protection BC for six years during which time claims for refunds may be submitted directly to Consumer Protection BC.