Sask. mother wants payday loan reform after son borrowed tens of thousands to fund addiction
'He wanted to get high, or he was high, and he went in and they loaned him money over and over'
A Regina mother is cautioning against payday loans after watching her son rack up thousands of dollars in debt to support a cocaine and crystal meth addiction.
Ronni Nordal spent the past five years hiding money and valuables from her son, Andrew, who would regularly steal from her to get the money he needed. But it wasn't until just over a year ago she realized he had another source of cash.
"He was indicating to me that he wanted to be [sober], but he said 'I go to these money stores and they're going to give me money, and I'm going to use,'" she recalled.
People in Saskatchewan can borrow up to 50 per cent of their paycheque from payday lenders. Those lenders can charge a borrowing rate of up to $23 for every $100 you borrow, which works out to an annual interest rate of 600 per cent.
Ronni was shocked to discover her son had been borrowing roughly half his paycheque from multiple payday lenders in Regina as often as every two weeks.
No help from payday loan stores
After Andrew expressed fear he wouldn't be able to stop using drugs as long as he could access payday loans, Ronni, a lawyer, offered to draft a letter on his behalf indicating that "I'm an addict, and if I'm coming in here borrowing money it's because I want to use and if you give me money you're allowing me to use."
It ended up, of course, that he wanted to get high, or he was high, and he went in and they loaned him money over and over.- Ronni Nordal
She hoped the letter would convince payday lenders to stop lending to her son, but quickly realized there was nothing she could do.
"I made a couple of phone calls to a couple of stores, and while the staff were very lovely and sympathetic, they all kind of said 'Do you have guardianship over him?' And I said 'No, he's an adult, he can make his own decisions,' so they said 'If he comes in here, we can't deny him.'
"So it ended up, of course, that he wanted to get high, or he was high, and he went in and they loaned him money over and over."
'I feel like they take advantage'
Andrew has been sober since attending a residential treatment centre in B.C. in December 2016.
"I feel they take advantage of people with an addiction problem who know how easy it is to get that money from them, because when you're an addict you don't think two weeks ahead," he said.
"I'd be going to four or five different stores with my [$1,100] paycheque, borrowing five hundred bucks from each one, and not caring, not thinking ahead.
"By paycheque time I'd owe a couple thousand dollars, so I'd just keep borrowing. I'd pay off one, but then I'd re-loan from that one to pay off another one, and just keep going."
Ronni estimates that Andrew borrowed more than $20,000 from payday lenders in the years leading up to treatment, much of which she had to settle during his first few months in B.C.
Both Ronni and Andrew believe he is ultimately responsible for his actions, but she'd like to see the government ban payday loans, or introduce regulations that make it impossible to borrow from more than one lender.
Short-term lending industry responds
While the Saskatchewan government is making changes to payday loan fees in the province — lowering the borrowing rate to $17 for every $100 you borrow starting on Feb. 15, which means an annual interest rate of roughly 450 per cent — the president and CEO of the Canadian Consumer Finance Association (CCFA), formerly the Canadian Payday Loan Association, says the freedom to borrow from multiple lenders is important.
The CCFA represents the majority of Canada's regulated providers of small-sum, short-term credit, including payday loans, instalment loans, term loans, lines of credit, and cheque cashing services. CCFA member companies operate a total of 961 licensed stores and online businesses across the country.
"When people come into our member establishments, most of the time it's to solve a particular problem they have," said CEO Tony Irwin.
"Because there are regulations in place, for example in Saskatchewan you can only borrow up to 50 per cent of your net pay, it's possible that going to one lender will not give you the the money you need to fix your problem."
Irwin said he's sympathetic to Andrew's story, but it's not one he hears frequently.
"Clients come from all kinds of backgrounds," he explained, saying most often it's "the single mother who needs a bit of help until payday, or the pensioner who needs their furnace fixed."
Irwin said the industry does what it can to make sure clients are well informed about the rules and regulations around the loans they're borrowing.
He acknowledged there is room for improvement, but maintains the borrower is responsible for understanding the lender's terms and making sure they can pay back any loan.