Money lender's tactics questioned
A storefront money lender who required a Calgary woman to pay back nearly double the amount of her loan is under investigation by Alberta officials.
The province has already issued an order against Cash Store Financial, which owns The Cash Store and Instaloans.
'To the extent that the allegations are not supportable, Cash Store will take all necessary steps to dispute the findings and the order.
Donna Kapalka, a disabled woman on a fixed income, said she borrowed $100 from Instaloans in February and had to pay back nearly $195.
In Alberta, money lenders can only charge $23 on every $100 borrowed. Kapalka received the money on a "cash card," similar to a pre-paid credit card with a $100 limit.
"When I told everybody what I had to pay, they said that's a heck of a lot of money," she said.
Staff told her the fee was high because she was issued the cash card, Kapalka recalled. "I said you never gave me any other option."
Company disputes order
In May, Service Alberta issued an order against Cash Store Financial. The order says the company can't charge extra for loans put on credit cards and should allow borrowers to cancel loans during a cooling-off period.
In response to the order, the company issued a statement on its website last month, calling the order "surprising" and arguing it has been "a leader in consumer protection."
"Company policy is to provide customers with the ability to immediately receive proceeds of their loan by way of cheque. Customers can and do receive loan proceeds, in branch, immediately upon request. The receipt by a customer of a loan offered or arranged by Cash Store is not contingent upon the purchase of any other good or service, including cash cards," he said.
"To the extent that the allegations are not supportable, Cash Store will take all necessary steps to dispute the findings and the order."
The province has fielded more than a dozen complaints against the company and is investigating Kapalka's complaint, said Service Alberta spokesman Mike Berezowsky.
"We issued a director's order – that's a step up from a warning. It's a legally binding order under the Fair Trading Act that the company has to comply with the conditions of it."
Such orders are sometimes simply an interim measure while they investigate other complaints, he said.