Payday loan company must refund B.C. fees
Consumer Protection BC is ordering the payday lender The Cash Store to issue refunds to consumers after finding it guilty of loan violations.
The loan company, which also operates outlets under the name Instaloans, was found to have charged unlawful fees on its consumer loans.
The maximum legal interest limit on loans is 23 per cent per year.
A spokeswoman for Consumer Protection BC said Wednesday the company was in violation, even though it had been clearly warned about illegal practices.
'We're serious about enforcing consumer law.'—Manjit Bains, Consumer Protection BC
"We've been working with the company to educate them on the law in British Columbia and requesting them to come in compliance with the law," said Manjit Bains. "They have chosen not to."
Bains said the restitution to all loan recipients could total up to $5 million.
The Cash Store has also been ordered to pay $25,000 in penalties and to reimburse Consumer Protection BC for its investigation costs.
The company, which has 63 branches in B.C., has 30 days to appeal the decision.
Consumers should make sure they understand their rights before taking a payday loan, said Bains.
"What we are trying to do here is help consumers be aware of what the law is here in British Columbia and to inform consumers of their rights in this legislation," she said. "But the message we're also sending to the industry is that we're serious about enforcing consumer law."
Consumer Protection BC is a not-for-profit corporation created to strengthen consumer protection in B.C. and enforce consumer protection laws.
With files from the CBC's Meera Bains