VICTORIA, May 3, 2012 /CNW/ - Consumer Protection BC has filed a Notice of Penalty and Compliance Order with The Supreme Court of British Columbia after Cash Store Financial Inc., a Canadian payday lender more commonly known as The Cash Store or Instaloans, failed to meet requirements laid out in their March 23, 2012 compliance order and notice of administrative penalty.
Cash Store Financial was ordered to immediately comply with BC payday lending laws and was given 30 days to pay a $25,000 administrative penalty as well as costs incurred by Consumer Protection BC. Cash Store Financial has failed to comply with this order.
"Cash Store's failure to take action has led us to take the next steps to ensure consumers are protected when using payday lenders," said Manjit Bains, vice president of corporate relations, Consumer Protection BC.
Consumer Protection BC has added 10 per cent in late penalty fees to the $25,000 administrative penalty owed by Cash Store Financial bringing the total to $27,500. Cash Store Financial has also been directed to maintain all documentation related to loans subject to the original compliance order.
Cash Store was also ordered to begin refunding consumers who had been overcharged since November 1, 2009 and they have been given until June 21, 2012 to meet this requirement. The total amount to be refunded is not yet known, but may be in the millions of dollars.
"Consumers who have been overcharged must be reimbursed immediately by Cash Store Financial," said Bains.
In response to consumer concerns, an online refund tracking form has been set up on Consumer Protection BC's website for customers of The Cash Store and Instaloans who think they are eligible for a refund.
"We are encouraging any consumer who received loans from The Cash Store or Instaloans with a cash card to contact Consumer Protection BC and register on our website," said Bains. "Our job is to ensure consumers know their rights and are able to seek a refund if they have been overcharged."
An investigation launched in 2010 by Consumer Protection BC concluded that Cash Store Financial was charging customers more than the maximum legal amount of $23 per $100 on payday loans by charging additional fees to issue loans on cash cards. The payday lender was issued a Compliance Order in November 2010 to stop charging the unlawful fees and refund customers. Cash Store Financial requested a reconsideration of the decision which was completed in March 2012; the key elements of the original decision were upheld.
Updates about payday lending can be found at www.paydayloanrightsbc.ca. Consumers with questions about payday lending in BC may contact Consumer Protection BC toll free at 1-888-564-9963 or firstname.lastname@example.org. Follow this conversation on Twitter #debtinfoBC.
About Consumer Protection BC: Consumer Protection BC is a not-for-profit corporation created to strengthen consumer protection in BC and enforce consumer protection laws. The organization's vision is confident consumers and trusted businesses in a thriving marketplace. Consumer Protection BC licenses and inspects specific industries, responds to inquiries, investigates alleged violations of consumer protection laws, and educates consumers and businesses about their rights and responsibilities under the law. For more information: www.consumerprotectionbc.ca. Twitter @ConsumerProBC.
For further information:
Chris Smithers, Director of Industry Relations