Same-day loan ads targeted at Nova Scotia renters raise concerns
Advertising suggests looking after emergency expenses with 'affordable loan'
Ads for same-day loans targeting people who need rent money have been appearing in Nova Scotia, and a credit counsellor is concerned that a high-interest fix could start a cycle of payments people can't afford in the midst of an already volatile housing situation.
In one online advertisement, easyfinancial Services offers Nova Scotia renters same-day loans from $500 to $15,000. It suggests looking after emergency expenses with an "affordable loan."
Interest for payday loans can start at 29.9 per cent. John Eisner, president and CEO of Credit Counselling Services of Atlantic Canada, says that is concerning.
"I'm appalled by it," he told CBC Radio's Information Morning Wednesday.
Eisner said interest rates can legally be as high as 60 per cent, and ads for loans like these only come out when people are vulnerable.
These high rates are "compounding the problem," Eisner said.
Manuel Moncayo-Adams, a resident of Halifax, saw the ad on Facebook for the first time this week.
"I mean an ad like this any time is abhorrent," he said Wednesday.
Moncayo-Adams said he believes any advertising directed at struggling renters is insensitive and predatory, particularly after seeing last week's teardown of a tent encampment outside Halifax's old central library.
In an email, a spokesperson for goeasy, the parent company of easyfinancial, helps "provide access to credit for non-prime Canadians."
"Easyfinancial is not a payday lender — we are an alternative financial provider that bridges the gap between banks and payday lenders," said Bryan Tritt, goeasy's vice president of communications, public relations and marketing.
Eisner said people should look to non-profit groups for help before choosing short-term, high-interest loans.
He said the problem begins with the housing situation making people more vulnerable to same-day loan companies, which can put them in the "revolving door" of multiple loans.
Eisner said the issue isn't going away anytime soon. "Regardless of what [payday loan companies] say, they targeted the vulnerable people."
With files from CBC Radio's Information Morning