Cash Store Ordered to Refund Payday Loan Customers
Consumer Protection BC announced that it is ordering Cash Store Financial, known as Cash Store or Instaloan, to refund customers unlawful fees charged since late 2009 to comply with legislation.
Under current law, payday loan transactions have a maximum fee of $23 per $100. Consumer Protection BC has concluded from their 2010 investigation that Cash Store has been charging customers more than the maximum amount through additional fees applied to loans accessed through cash cards.
In November 2011, Cash Store was issued a Compliance Order to stop charging unlawful fees and refund its customers. In light of this decision, Cash Store requested a reconsideration of the decision, which was granted in early 2011. Through the reconsideration process, the original decision was confirmed.
“Payday loan consumers cannot be charged extra for cash cards, that is the law,” said Manjit Bains, Vice President of Corporate Relations, Consumer Protection BC. “This decision sends a clear message to the industry and to consumers that consumers must never have to pay more than $23 for every $100 borrowed.”
SEE RELATED STORIES FROM THE WDM CONTENT NETWORK:
Click here to read the latest edition of Business Review Canada
Cash Store has now been ordered to comply with BC payday lending laws and refund its customers those additional charges since November 1, 2009. A fine of 25,000 will also be paid by Cash Store Financial—an administrative penalty as well as costs incurred by Consumer Protection BC.
Consumers should expect reimbursement within the next 90 days. Cash Store has 120 days to provide proof of reimbursement to Consumer Protection BC.
