The Cash Store and Instaloans have been ordered to repay customers who were illegally overcharged on payday loan cash cards.
Edmonton-based Cash Store Financial Inc., which has The Cash Store and Instaloans branches in Victoria, Esquimalt, Saanich and Colwood, was the focus of a Consumer Protection B.C. investigation in 2010. The inquiry revealed customers were being billed more than the allowed maximum of $23 per $100 borrowed on cash cards.
The company was ordered in November 2010 to stop the practice and issue refunds. Cash Store Financial appealed the decision, but Consumer Protection B.C. announced last week that much of the original compliance order has been upheld.
The money-lending company continues to dispute the order.
“We remain of the view that we are not an issuer of cash cards and we are not therefore required to issue any refunds in the manner directed by Consumer Protection B.C.,” Cash Store Financial stated on its website.
Still, Consumer Protection B.C., a not-for-profit organization that operates at arm’s length from government, maintains any clients who have been overcharged since Nov. 1, 2009 must receive refunds within a 90-day period. Cash Store Financial must also pay a $25,000 administrative penalty and other costs.
“Payday loan consumers cannot be charged extra for cash cards, that is the law,” Manjit Bains, vice-president of corporate relations for Consumer Protection B.C., said in a statement. “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.”
The money lender is considering launching a second appeal.
“In any event … any potential refund would not be significant,” the company said.
For more information, please call Consumer Protection B.C. at 1-888-564-9963 or visit www.consumerprotectionbc.ca.
Did you know?
According to Consumer Protection B.C., more than 700,000 payday loans were taken out in B.C. over the past year.