Agassiz’s Pioneer Trading Post has been ordered to pay $3,397.13 to the former owner of a vintage accordion after a judge found their interest rate was the equivalent of 300 per cent a year. (Grace Kennedy/The Observer)

B.C. pawn shop ordered to pay thousands after charging ‘criminal’ interest rate

An Agassiz pawn shop charged 25% interest a month, similar to other shops in the region

Agassiz’s Pioneer Trading Post has been ordered to pay more than $3,000 to the former owner of a vintage accordion, after a judge found the pawn shop’s interest rates were “criminal.”

In a judgment issued last week (Sept. 5), provincial court judge Kristen Mudstock said the Fraser Valley business could not legally charge 25 per cent interest monthly for a three-month loan agreement.

The business had taken Garry Hemminger’s antique accordion as security for a $500 loan back in 2017, which Hemminger would be required to pay back with the interest at the end of the three months. If he didn’t, the accordion would go to Pioneer Trading Post.

“The claimant and the defendants did not enter into this pawn agreement for an illegal purpose or with an evil intention. This was not a classic loan-sharking transaction,” Mudstock wrote in her decision.

However, because the interest rate exceeded 60 per cent a year (the annual interest rate was effectively 300 per cent, even if the loan was only in effect for three months), it was found to be a criminal interest rate.

SEE ALSO: 2-year investigations nets $900,000 in refunds for payday loan customers

According to the judgment, owners Tracey and Adrian Davies were unaware that their interest rate was considered criminal. However, they were still ordered to pay Hemminger back $3,900 for the 1978 Excelsior accordion — which had been sold in September of 2017 — minus the principal loan amount and the original $1.50 electronic transfer fee, as well as $1.37 in interest.

“We really debated if we were going to do pawn anymore,” Tracy Davies said about receiving the judgment.

Immediately after the judgment, Davies said she began searching to find out what other pawn shops were offering for their loans.

“The minute we got our judgment, we went online right away to find out what we were doing wrong,” she said.

She found that their interest rates were in line with what many pawn shops were asking around the region, and was in fact lower than some. A few Davies had contacted were asking for up to 30 per cent a month, while some offered lower interest rates, around 10 per cent, but had exorbitantly high “storage fees” for the item.

The main difference Davies found between their loan terms and other pawn shops is that Pioneer Trading Post offered theirs as a three-month loan, while others had it as a renewable one-month loan.

“It’s exactly the same as everyone else is doing,” she said. “We just didn’t renew it every month. That’s the only difference.”

SEE ALSO: B.C. government aims to stop concert ticket, payday loan gouging

Under the criminal code, the legal monthly interest rate is just five per cent.

Since receiving the judgment last week, Davies said the shop has altered its agreements for future loans to be a renewable monthly loan — something they had wanted to avoid originally because of the hardship it could cause for people looking for money.

“Can you get on your feet in one month?” she said. “That’s the major reason why we did it” as a three-month loan.

Davies said this is the first time in the shop’s three years in business that they had dealt with a legal situation like this.

The pair are looking into getting a lawyer to appeal the judgment, so they don’t have to pay thousands to Hemminger, who had never repaid the original loan or interest.



grace.kennedy@ahobserver.com

Like us on Facebook and follow us on Twitter

Just Posted

New pool systems being checked out as renos near completion

Maple Ridge Leisure Centre pools open some time next year

Former Maple Ridge mayor new Chamber president

Al Hogarth takes over from Ken Holland

Caddy Shack, one of B.C’s last surviving strip clubs, baring all again for Christmas charity

25th annual event is Sunday and raises money for the Maple Ridge-Pitt Meadows Christmas Hamper Society.

Bill 41 a ‘step toward reconciliation’: MLA

Katzie will get meaningful consultation, says Chief George

Freshco opens in Maple Ridge on Thursday

Free eggs for first 500 customers

VIDEO: Federal Liberals’ throne speech welcomes opposition’s ideas

Trudeau will need NDP or Bloc support to pass legislation and survive confidence votes

VIDEO: John Lennon’s iconic Rolls Royce rolls into Vancouver Island college for checkup

Royal BC Museum, Camosun College and Carriageworks Restorations come together to care for car

VIDEO: Rockslide closes part of Highway 93 in Fairmont Hot Springs

Geotechnical team called in to do an assessment after rocks fell from hoodoos

Chilliwack mom gives back to neonatal unit with Christmas stocking drive

Ashley Durance is paying it forward to other families and their babies following daughter’s NICU stay

Petition calls for appeal of ex-Burns Lake mayor’s sentence for sex assault

Prosecution service says Luke Strimbold’s case is under review

Northwest B.C. wildlife shelter rescues particularly tiny bear cub

Shelter co-founder says the cub weighs less than a third of what it should at this time of year

BC firefighters to help battle Australian bushfires

Canada sent 22 people, including 7 from B.C.

B.C. NDP touts the end of MSP premiums

Horgan, James held news conference to reiterate that people will get their last bill this month

Illicit drug deaths down, but B.C. coroner says thousands still overdose

Chief coroner Life Lapointe says province’s drug supply remains unpredictable

Most Read