People who used the payday loan services of The Cash Store Financial Services or Insta-loans will be getting a bit of a break to help with post-Christmas bills.
After delays and discussions, the Edmonton company has said it will comply with Consumer Protection B.C.’s order to reimburse customers who, between November 2009 and March 2012, were charged for cards loaded with the money advanced as payday loans.
Consumer Protection BC vice-president Manjit Bains said her agency has been working with The Cash Store/Insta-loans since 2009 and last March ordered the company to stop charging the extra fees and to repay customers.
The agency then issued a supplemental compliance order on Nov. 30, setting out a schedule for reimbursement. The first deadline was Tuesday, by which the company was supposed to provide a list of consumers due refunds.
If the whole schedule was followed, the company then would be able issue the refunds by February.
“They have to provide us all the communications material because we want to review the message they’re going to be providing consumers.”
The refund amounts will vary, but Bains said many customers may have used the service several times.
“They need to reimburse customers now, as they have been waiting long enough for their refunds.”
A total of more than $1 million will be refunded in B.C. to people who took out 68,000 loans. Payday loans are regulated under the Payday Loans Regulation, which says total fees can never be more than 23 per cent. The most that can be borrowed is $1,499, which must be repaid within 62 days. Usually, pay day loans are taken out in order to get short-term advances on pay cheques.
Bains added that since 2009, Consumer Protection BC has fielded about 2,000 calls, with most of those concerning The Cash Store.
According to a release from Consumer Protection BC, The Cash Store has to take out ads and send letters to ensure customers are aware of the refunds that are available. Any money left unclaimed will be held by Consumer Protection BC for another six years for future claims from consumers.
The refund process will be supervised by an independent auditor and Consumer Protection.
Bains said Consumer Protection BC has provided the company “plenty of opportunity to understand the law and plenty of opportunity to ask questions.”
She’s “very optimistic” the company will comply and refunds will be issued in February.
She added that in the Maple Ridge area, there are only four pay-day loan companies, two of which belong to The Cash Store.
“When it comes to consumer choice, there isn’t a lot in Maple Ridge, so that’s why it’s very important for consumers to understand their rights under the law and to understand that The Cash Store is expected to reimburse consumers if they took out any loans between November 2009 and March 2012.”
The company didn’t return phone calls.