EDMONTON, May 13 /CNW/ - The Cash Store Financial Services Inc. ("Cash
Store Financial")(TSX:CSF), formerly Rentcash Inc., announced today that it
has settled two class action lawsuits commenced in British Columbia in 2005
and 2008 concerning brokerage fees and interest charged to customers of The
Cash Store and Instaloans (the "BC Settlement"). The BC Settlement is
conditional on receiving court approval, and follows a broader settlement
already reached and approved in Ontario (the "Ontario Settlement"). Cash Store
Financial has one remaining class action lawsuit outstanding which applies to
customers who obtained loans in the Province of Alberta only.
This settlement is restricted to customers who either obtained their
loans in British Columbia, or alternatively, resided in British Columbia at
certain specific time periods, and repaid their loan and broker fees in full
within prescribed timelines (the "Class"). Some members of the Class may be
eligible to participate in both the BC Settlement and the Ontario Settlement,
in which case they will have to choose under which settlement to make a claim.
Making a claim in one settlement renders the customer ineligible to
participate in the other settlement.
In accordance with the BC Settlement, Cash Store Financial will establish
a settlement fund consisting of a cash and vouchers fund in an amount equal to
20% of the total broker fees paid by the settlement class members up to the
court approval date. If the BC Settlement is approved, a final determination
of the total broker fees paid will be calculated. However, the maximum amount
of the settlement fund is not expected to exceed $14 million in cash and
The settlement fund will be used to make payments to the Class using a
mix of cash and vouchers. The actual payments made to the Class from the
settlement fund will depend on the number of class members who actually file a
claim, that is, the "take-up" rate.
The vouchers are non-transferable and may be used to pay either future or
existing service fees on payday loans brokered by The Cash Store or
Instaloans, or can be redeemed for cash only during the six month period which
begins three years after the vouchers are issued. Legal fees and related costs
will also be paid from the settlement fund.
The BC Settlement does not constitute an admission of liability by Cash
Store Financial, The Cash Store or Instaloans and contains a full and final
release of all claims that have or could have been brought under the two
actions unless class members have specifically opted out of the settlement.
Cash Store Financial, The Cash Store and Instaloans maintain that they operate
in compliance with all applicable federal and provincial laws.
About The Cash Store Financial Services Inc. (formerly Rentcash Inc.)
Cash Store Financial is the only payday advance broker in Canada publicly
traded on the Toronto Stock Exchange (TSX:CSF). Cash Store Financial operates
more than 420 branches across Canada under two banners: The Cash Store and
The Cash Store and Instaloans act as brokers to facilitate payday advance
services to income-earning consumers who may not be able to obtain them from
traditional banks. Cash Store Financial also provides a private-label debit
card, The Freedom Card, and other ancillary products.
Cash Store Financial employs more than 1,600 associates and is
headquartered in Edmonton, Alberta.
This News Release contains "forward-looking information" within the
meaning of applicable Canadian and United States securities legislation.
Forward-looking information includes, but is not limited to, information with
respect to our objectives, strategies, operations and financial results,
competition as well initiatives to grow revenue or reduce retention payments.
Generally, forward-looking information can be identified by the use of
forward-looking terminology such as "plans", "expects", or "does not expect",
"is expected", "budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", or "does not anticipate", or "believes" or variations of such
words and phrases or state that certain actions, events or results "may",
"could", "would", "might", or "will be taken", "occur", or "be achieved". In
particular this News Release contains forward-looking statements in connection
with the Cash Store Financials goals and strategic priorities, introduction of
products, share repurchase initiatives and branch openings. Forward-looking
information is subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, level of activity, performance or
achievements of Cash Store Financial, to be materially different from those
expressed or implied by such forward-looking information, including, but not
limited to, changes in economic and political conditions, legislative or
regulatory developments, technological developments, third-party arrangements,
competition, litigation, risks associated with but not limited to, market
conditions, and other factors described in our Annual Information Form ("AIF")
dated August 28, 2008 under the heading "Risk Factors". All material
assumptions used in making forward-looking statements are based on
management's knowledge of current business conditions and expectations of
future business conditions and trends, including our knowledge of the current
credit, interest rate and liquidity conditions affecting us and the Canadian
economy. Although we believes the assumptions used to make such statements are
reasonable at this time and have attempted to identify in our continuous
disclosure documents important factors that could cause actual results to
differ materially from those contained in forward-looking statements, there
may be other factors that cause results not to be as anticipated, estimated or
intended. Certain material factors or assumptions are applied by us in making
forward-looking statements, include without limitation, factors and
assumptions regarding our continued ability to fund our payday loan business,
rates of customer defaults, relationships with, and payments to, third party
lenders, demand for our products, as well as our operating cost structure and
current consumer protection regulations. There can be no assurance that such
information will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such information.
Accordingly, readers should not place undue reliance on forward-looking
information. We do not undertake to update any forward-looking information,
except in accordance with applicable securities laws.
For further information:
For further information: on Cash Store Financial please contact: Gordon
J. Reykdal, Chairman and Chief Executive Officer, Cash Store Financial, (780)
408-5118; or Michael J.L. Thompson, Senior Vice President and Corporate
Secretary, Cash Store Financial, (780) 408-5595, cell: (780) 934-4729