TORONTO, June 9 /CNW/ - A proposed CDN$100 million settlement in the
class action against National Money Mart Company ("Money Mart") and Dollar
Financial Group Inc. ("Dollar Financial") was announced today.
Subject to Court approval, the parties to the class action have reached a
settlement whereby the defendants will pay CDN$27.5 million in cash, a minimum
of $43 million in debt forgiveness incurred on or before April 30, 2009 and
$30 million in fully transferrable transaction credits to the class members.
The transaction credits expire four years from the date of settlement
approval. At the end of the four year term, all unused credits will be applied
for the benefit of Money Mart's customers who secure a payday loan from Money
Mart from that date forward in the form of a reduction of Money Mart's usual
and ordinary rate. The Court will direct and supervise this fee reduction
"We are very pleased with this negotiated settlement totaling more than
$100 million which occurred after four weeks of trial," said Harvey T.
Strosberg, Q.C. of Sutts, Strosberg LLP. "Upon approval of the Settlement by
the Court, some of the Class Members will be released from the $43 million
they owed Money Mart as of April 30, 2009. This outcome is fair, reasonable
and in the best interests of the Class Members."
The class action, which was started in 2003, alleges that Money Mart and
its parent company, Dollar Financial breached section 347 of the Criminal Code
of Canada by charging and collecting fees and interest at an effective annual
interest rate in excess of 60% on "Fast Cash Advance" loans, also known as
The class action asserts that all of the interest and fees charged and
collected by Money Mart and its franchisees on "Fast Cash Advance" loans
repaid by cheque on the borrower's next payday are, as a matter of law,
"interest" notwithstanding that Money Mart called them "fees". If the charges
are all interest, then the effective annual interest rate on these loans
substantially exceeded 60%.
The case was prosecuted by the law firms of Sutts, Strosberg LLP; Heenan
Blaikie LLP; Paliare, Roland, Rosenberg, Rothstein LLP and Koskie Minsky LLP.
Further information about the Money Mart Class Action can be accessed at
For further information:
For further information: For media information please contact: Harvey T.
Strosberg, Q.C., Sutts, Strosberg LLP, (519) 561-6228